Aug 08, 2017

Sarine’s Q2 2017 Revenue Up 12%, Profit Rises 32% Over Q1 2017

Sarine Technologies Ltd, announcing its financial results for the second quarter ended 30 June 2017 reported that revenue for the period of US$ 18.2 million was 12% higher than Q1 2017 revenue of US$ 16.3 million; and net profit of  US$ 3.2 million was up 32% as compared to a profit of US$ 2.5 million for Q1 2017.

Sarine’s H1 2017 Group revenue totaled US$ 34.4 million and approximately 41% of this revenue was recurrent in nature. “Trade revenues from polished diamond related products and services represented about 2% of H1 2017 revenue and the proportion of contribution from this business segment is expected to grow as the year unfolds,” the Company stated.  For the half year, the Group recorded net profit of US$ 5.7 million.

However, on a year-on-year basis, both Q2 2017 and H1 2017 results were lower than those in the previous year. “This is mainly due to lower equipment sales in India as well as higher operating expenses, in part due to the weaker U.S. Dollar.” The Company clarified. “The Group’s sales of inclusion mapping systems for smaller stones (primarily the MeteorTM) were affected by patent and copyright infringement activities of an illegal competitor in India, against which the Group has been taking aggressive legal and other actions.”

With the addition of 16 GalaxyTM deliveries in Q2 2017, Sarine  expanded total installed base to 332 as of 30 June 2017 and boosted contribution of recurring revenue to about 41% of overall revenue in H1 2017.  

“Although the illicit competition is likely to prevail into Q3 2017, Sarine remains confident of maintaining its solid market leadership position, as evident by the record number of stones processed by its growing base of inclusion mapping systems,” the Company said. “The Group also expects growth in the number of stones scanned for Sarine ProfileTM to accelerate in the second half of 2017.”

Sarine’s CEO, David Block commented: “For Sarine ProfileTM, we continue to enjoy successful business expansion in the Asia Pacific region and North America. In addition to new customers commencing services in Thailand and South Korea this quarter, we have concluded plans for launches with major Hong Kong and mainland China chains, with actual in-store operations scheduled for the beginning of 2018. Based on previous experience, we expect revenue from sales programs utilising Sarine ProfileTM in H2 2017 to double the revenues realised H1 2017.”

The Group will commence commercialisation of its new technologies for Clarity and Colour grading of polished diamonds in Q3 2017,   with the formal launch scheduled for mid-September.

“These technologies address the US$ 500 million 4Cs grading market which currently generates about 7 million reports a year for stones typically a fifth of a carat and up, at prices ranging from US$ 50 to US$ 100 a carat. We believe that by introducing a cost-effective, consistent and reliable automated solution, the addressable market can be expanded to polished diamonds of a tenth of a carat and up, effectively increasing the total addressable market value by 50% to US$ 750 million annually,” explained   Block.