Sarine Technologies Ltd. recorded revenue of $35.96 million for the six months that ended 30th June, 2021, an increase of 61% over the corresponding period last year. Net profit in H1 2021 surged to $12.6 million from $1.2 million in H1 2020, benefiting from significantly higher revenue and gross profit margin, which expanded due to economies of scale with increased overall sales and a favourable product mix, the company noted.
India accounted for 70% of Sarine’s total H1 2021 revenue. H1 sales in India grew 46% to $25.14 million. H1 revenue from Africa, its second biggest market, more than tripled to $4.55 million.
During the period under review, a strong resurgence in manufacturing activities in India, which started towards the end of Q3 2020 continued into 2021, Sarine said. This recovery in rough diamond manufacturing was driven by strong demand for diamond jewellery, following the reopening of retail activities in key global markets in late summer 2020 and carrying over to a strong end of year holiday season in the US market and a buoyant Chinese New Year season in early 2021 throughout most of the Asia Pacific market.
The challenges and uncertainties of imminent lockdowns caused by the springtime resurgence of the Covid-19 virus in India, kept most manufacturers operating throughout May and June, foregoing their summer vacations to meet demand for polished diamonds, it noted. Strong consumer demand for diamond jewellery has in turn resulted in strong sales of rough diamonds in 2021. The price increases in 2021 have reversed all the price reductions of 2020, and rough diamond prices are now higher than before the pandemic struck in early 2020. With rough price increases outpacing the rise in polished diamond prices, pressure is mounting on the profitability of manufacturers. This situation may not be sustainable, and is a factor to track, Sarine cautioned.