Sarine Technologies Ltd  reporting   its financial results for the fourth quarter and full year ended 31 December 2017,  said that revenues for Q4 2017 stood at US$ 12.9 million, marking a  rise of 15% over the previous quarter (Q3 2017).

The results were helped by the improvement in  business sentiment  in the diamond manufacturing sector,  Sarine said.   “The increase was mainly attributed to higher sales of diamond manufacturing related capital equipment,” the Company added. “The Group delivered 11 Galaxy® family systems to customers, comprising 6 Galaxy® systems and 5 MeteorTM systems, during the quarter.”

Though gross profit was also higher  for  Q4 2017 compared to Q3 2017;  gross profit margin was marginally lower at 65% “due to changes in product mix”.

The Group  reported   decreased operating expenses in Q4 2017 compared to Q3 2017. 

With higher revenues and lower operating expenses, the Group recorded profit from operations of US$ 2.1 million. After  tax adjustments,  the  Group concluded Q4 2017 with a net profit of US$ 0.6 million which compares favourably to the net loss of US$ 0.5 million incurred in Q3 2017.

However, for the full year year, Sarine’s   Group revenue was lower at US$ 58.6 million. This was due to lower sales of capital equipment as a result of the slowdown in diamond manufacturing activities “amid higher than normal surplus inventories of polished diamonds in H2 2017  as well as illicit competition in India” Sarine explained .

“With an installed base of 345 Galaxy® family systems as at 31 December 2017, total recurring income amounted to just under half of Group revenue,”  the Company said. “Overall polished diamond retail-related revenues, currently from Sarine Profile and its various components, represented 2% of Group revenue.”

The Group recorded a net profit of US$ 5.8 million in FY2017. The Board has recommended  a final dividend of US cents 1.5, bringing total dividends for the year to US$ 12.3 million, slightly over the Company’s cash flow from operating activities (US$ 10.8 million).

“Against the backdrop of significantly reduced DeBeers sights, we believe this is indicative that we are not losing significant existing business and are expanding our customer base, illicit competition notwithstanding,” commented   David Block, CEO of the Group. “Notably, as DeBeers sights are now increasing, we are seeing a commensurate increase in our scanning activities, with new scanning records being set.  Going forward, the Group expects sentiments in the midstream industry to improve, as the year-end holiday season sales reduced inventories significantly (to the point of decided shortages of certain categories of goods), and expectations are upbeat for robust Chinese New Year and Valentine’s Day sales. The Group will continue with its active efforts in patent and copyright enforcement to defend its intellectual property rights.”

The   Group  has set as its target for 2018, to double the number of stones it scanned in 2017.      

The Group has introduced the Sarine Diamond JourneyTM, “a graphical depiction of the actual rendition of the stone’s transformation from its unique rough state to a one-of-a-kind polished gem” in order to enhance its offering -- Sarine ProfileTM .      “Besides providing captivating insights of the painstaking craftsmanship behind the unique gem’s creation, the documentation should also help to reinforce customers’ confidence in the responsible sourcing and manufacturing of their diamonds,” the Company explained.

Another milestone was the opening of new Sarine Technology Lab on February 18, 2018.  Sarine said it will provide “the first ever technology-driven 4Cs diamond grading reports”.