May 15, 2018

Sarine’s Net Profit for Q1 FY 2018 up by 27% to US$ 3.1 Mn

Sarine Technologies Ltd announcing  its financial results for the first quarter ended  March 31, 2018 (Q1 2018), said that for the period, the Group recorded revenues of US$ 16.7 million.  

Referring to the revenue growth, Sarine explained, “Year-on-year improvement was marginal, but is still noteworthy as recurring revenues continued to climb even as the quantities of rough stones entering the pipeline declined by 10%, compared to the corresponding period in 2017. The significant growth in revenue on a sequential quarterly basis, driven by higher equipment sales and increased recurring income, reflects renewed robust activities in India’s midstream diamond manufacturing sector.”

During the quarter, the Group delivered 12 Galaxy® family systems to customers, comprising five  of the new Meteorite™ model, five of the Meteor™ model, one Galaxy® and one Galaxy® XL.

“Notably, all but the Galaxy® XL were delivered to customers in India, indicative of the Group's growing containment of the illicit competition's activities,” Sarine underlined. “With the installed base of Galaxy® family systems expanded to 357 units as of 31 March 2018, overall recurrent income represented about 45% of group revenue. Polished diamond retail-related revenue segment accounted for 2% of revenue in Q1 2018.”

Little wonder then, that on the back of the increased sales,   profits also grew:   gross profit rose to US$ 11.4 million and gross profit margin improved to 68%.

The Group also reported lower research and development costs in Q1 2018 as major developmental efforts were completed – these included  R&D on Sarine Clarity™, Sarine Color™ and Sarine Journey™. 

“However, general and administrative expenses were higher due to third-party professional fees related to ongoing IP protection activities,” Sarine noted. Income tax expense was also significantly lower.  

“With higher revenue and well-managed operating expenses, net profit for the period rose 27% to US$ 3.1 million,” the Company declared.

Sarine reported too, that its  “ground-breaking” AI-based 4Cs diamond grading reports were met with “enthusiastic market reception”.

“Following the opening of the Sarine Technology Lab on 18 February 2018 to provide the first-ever technology-enabled artificial-intelligence-based 4Cs diamond reports, K-Uno, a key high-end Japanese retailer, announced in mid-April the adoption of the Group’s new reports,” the Company stated. 

Sarine  also plans to open an additional diamond grading lab in India in May 2018.

“To support our customers who will be launching programmes with our reports in Q2 and Q3 2018, we are opening a second lab in India, close to our customers' suppliers, in May 2018,” announced David Block, CEO of the Group. "With the new Indian lab, the Group will have the increased capacity and the necessary accessibility to meet the demand from these additional higher-volume retail customers."

The Company added that its balance sheet remains healthy with short-term investments, cash and cash equivalents of US$ 35.5 million at quarter’s end, with no debt.