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Sarine's 4Q Revenue +10%, Profit -13%
Feb 23, 2015 8:15 AM
By Ronen Shnidman
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RAPAPORT... Sarine Technologies, a maker of diamond manufacturing equipment, reported that group revenue grew 10 percent year on year to $18.3 million during the fourth quarter that ended on December 31. Revenue growth was driven by increased sales of rough diamond planning and processing products and higher recurring revenue from the company’s Galaxy family of products.
Sarine said that it delivered seven new Galaxy systems to customers during the quarter. As a result, 190 Galaxy systems were installed and running as of December 31.
Group profit declined 13 percent to $3.89 million during the quarter due to higher operating expenses, a slightly higher income tax rate and higher finance expenses due to the depreciation of the Israeli shekel against the U.S. dollar.
During 2014, Sarine’s revenue rose 15 percent to $87.8 million, with growth in all major geographies, except its “other” category that is comprised of mainly East Asian countries. Revenue from India, the company’s largest market, grew 19 percent to $69.6 million during the year. The largest year on year growth occurred in North America, where revenue increased 47 percent to $1.2 million. In contrast, revenue from other countries declined 23 percent to $5.5 million.
Recurring revenue from pay-per-use fees for the Galaxy family of products grew during the year along with the increased number of such machines installed worldwide. Recurring revenue comprised of 35 percent of the total revenue for the period.
Sarine’s management noted that its business was impacted by a reduction in global polished diamond manufacturing toward the end of 2014 caused by high rough diamond prices being out of sync with polished prices. The company added that high rough prices continued to negatively impact its business in early 2015. However, Sarine expects its operations to regain momentum as rough prices undergo a correction and due to overall stability in the global economy, particularly in the U.S.
“The diamond manufacturing industry in India is still experiencing liquidity issues and the decoupling of rough and polished diamond prices intensified in the fourth quarter of 2014,” said Uzi Levami, Sarine’s CEO. “The continuation of these headwinds into 2015 will affect our business activities in the immediate term.”
Levami added that Sarine anticipates a further price correction for rough diamonds in early 2015, on top of a 4 percent drop in prices in January. The company was optimistic of regaining its growth momentum with significant Galaxy system deliveries in 2015 when business sentiment in the diamond industry improves.
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Tags:
equipment, Galatea, Galaxy, machine, Ronen Shnidman, rough prices, Sarine
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