Dear fellow Shareholders, on behalf of the Board of Directors of Atlas Pearls Ltd I am pleased to present to you the Company’s 2024 Annual Report.

FY24 was a year of significant achievements for the Company with sales in excess of $41M, earnings (normalised EBITDA) of $22.6M and payment of two special dividends: 0.35 cents per share in September 2023 and 1.5 cents per share in March 2024.

Pearl prices in H1 FY24 averaged a record high of AUD$103/pce, softening in H2 FY24, realising an average of $84/pce for the year. This annual average is still well above long-term levels. There are indications that the end-demand for pearls from China remains strong. The Company held back a proportion of the FY24 year’s production, along with harvests late in FY24, for sales in FY25.

The quality of pearls harvested through the year remained below historic norms. However, with growing sophistication in the Company’s selling and distribution arrangements, the Company has been successful in achieving better average prices for its products. Atlas Pearls placed an increasing emphasis on private sales to selected customers and, in a rising market, shifted the balance of auctions more towards physical sales events. Sales events, with goods offered simultaneously online and at physical auctions, will continue to have a role as an important check on strength of demand and market pricing.

In my FY23 Chairman’s Address, I highlighted a number of areas on which we would focus to advance our prospects for long-term growth. Pleasingly, FY24 saw the Company make significant progress on a number of fronts including:

• Finalising the breeding matrix to identify the best matches between families while controlling in-breeding risks.
• Completing the appointment of new key personnel to fill some strategic gaps in the management team.
• Contracting to procure a new work vessel to improve productivity.
• Commencement of trials at Sumba for a new farm site.
• Documenting our extensive ESG program as a value proposition for potential investors and to better communicate to all stakeholders the considerable work we do within the communities where we operate.

It is also pleasing to report that the Company is in the best financial position for many years and has closed the financial year with cash of $17.6M, finished goods held for sale of $7.1M, and no debt.

The Board has again addressed capital management initiatives and has concluded that we are in the fortunate position of rewarding shareholders with franked dividends, which will provide a highly attractive yield against average share prices over the last 3-6 months. For the time being, and until we can get a clearer picture on longterm demand in pearl markets, these will be deemed to be special dividends.

Finally, I want to make special mention of our incredible team of employees and our loyal shareholders who have stuck with us through some really tough times over the past few years. It’s been very heartening to us to be able to properly reward all of our stakeholders, and we look forward to continuing to do this through FY25.

Sincerely

Geoff Newman
Chairman – 29 August 2024