Sarine Technologies Ltd, releasing its figures for the three-month period ended December 31, 2019, said that both its Group revenue and net profit were up in Q4 2019 on a sequential quarterly and year-on-year basis, but it still ended the year with revenue down 12% and a net loss of US$ 1.4 million on account of losses sustained in the first two quarters under tough industry conditions.

Reporting gradual stabilisation of industry conditions in the second half of the year, Sarine said that in H2 2019 the Group realised revenues of US$ 28.8 million, 28% more than US$ 22.5 million realised in H1 2019, and accordingly went to a profit of US$ 1.4 million in H2 2019 from a loss of US$ 2.8 million in H1 2019.

The company said that it made strong deliveries of 39 Galaxy® family systems to customers in Q4 comprising 21 systems of the Meteorite™ model and 18 systems of Meteor™ model, matching the record deliveries of Q3 2019. A little under a third of these systems were sold on a one-off business arrangement with no follow-on per-use revenues. With a record 145 systems delivered in FY2019, the company’s installed base has expanded to 555 systems as at 31 December 2019, Sarine said.

Despite the challenging industry conditions in FY2019, the Group shipped record numbers of Galaxy®-family inclusion mapping systems and scanned 17 million stones, a growth of 40% over FY2018. The strong growth in the number of stones scanned in 2019 was mainly due to the accelerated adoption of the Meteor™ and Meteorite™ systems for small and very small stones where payment is not on a per scan basis but a flat fee per machine per month.

Overall recurring revenues for FY2019 (including Galaxy®-related scanning, Quazer® services, polished diamond related services and annual maintenance contracts) were approximately 50% of overall Group revenue. Overall polished diamond retail-related revenues, currently mostly Sarine Light™ with maiden contribution from Sarine Diamond Journey™ rose some 27% in Q4 2019 over Q3 2019 and were just under 3% of overall Group revenue in FY2019.

The company reported that it also found strong interest in Sarine Diamond Journey™ traceability solution from leading global brands, key US retailers and diamond miners.

“In order to effectively address this growing level of interest, we have selectively added new sales personnel to further develop our markets in Asia and the United States. To support the strong interest in Sarine Diamond Journey™, we have added new midstream manufacturers participating in our Journey Official Partners Program and in the last few months, we have doubled the high quality Journey-ready diamond inventory to 60,000, creating an available pool of diamonds for retailers to select for their Journey initiatives", said David Block, the CEO of Sarine Technologies.

As the diamond industry entered 2020 with reduced inventories and accordingly more robust polishing activity, Sarine has benefited from continued recovery in the sales of capital equipment and continuing demand for Galaxy®-family inclusion mapping systems. With growing interest for Sarine’s products and services for polished diamonds, the Group has started FY2020 on a positive note. However, the recent outbreak of the Coronavirus has cast some uncertainty over retail market sentiments in China, the second largest market for polished diamonds globally, and as the effects of the disruption is still not clear, the Group is monitoring the situation closely.