Increased commission rates have helped soften the blow, as has a reduction in losses brought about by guarantees and a 30 per cent fall-off in costs. The result is a net profit of $12.2m, compared to $95.3m for the first quarter.
Looking at the whole of the first six months of 2009, operating revenues fell by just over a half on the second half of 2008 to $221.7m. Meanwhile, the $82.9m profit for the last six months of last year turned into a $22.3m loss from January to June 2009.
Despite the downturn, chief executive Bill Ruprecht said that the company was on the right track by increasing commission rates (total commission revenues up 41 per cent) while cutting costs (down 39 per cent).
“We adjusted quickly to the different and difficult environment that suddenly presented itself and we are very well positioned to capitalise on a market rebound and benefit from our improved margins and lower costs,” he concluded.
Sellers also appear to have adjusted to losing the cushion of guarantees and to curbing their expectations when it comes to reserves and sale prices.
Mr Ruprecht pointed to evidence of the market establishing new price levels in the selling rates registered in the spring and early summer sales of Impressionist, Modern and Contemporary art.
“In Impressionist and Modern art, those rates in our evening sales went from 64 per cent (November) to 81 per cent (May) to 85 per cent (June) and from 68 per cent (November) to 81 per cent (May) to 93 per cent (June) for Contemporary art” he said. “These figures and the 46 per cent increase in second quarter private sales to $134m show active participation at new price levels and give confidence to consignors and to buyers alike that there is now a more stable marketplace.”
Ivan Macquisten
