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Diamond Slump Hits Demand at Sarine

Jul 30, 2019 7:39 AM   By Rapaport News
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RAPAPORT... Sarine Technologies expects to report a loss for the second quarter, as continued market uncertainties led to lower demand for its diamond-manufacturing equipment.

The net loss will be approximately $1 million, the company cautioned earlier this month, compared with a profit of $4.1 million for the same period last year. Sarine also predicted revenue of approximately $11.5 million, a 36% decrease from the $18 million it reported for the second quarter of 2018.

Tightening credit in the manufacturing sector has led to lower sales in India, Sarine’s largest market, as customers there face liquidity issues, the company noted. The increase in popularity of lab-grown diamonds, as well as the US-China trade war, have also impacted sales, Sarine added.

“All these factors adversely affected conditions in the industry’s midstream, and resulted in a reduction of the [company’s] equipment sales as well as recurring revenues from inclusion-mapping services,” the company explained.

Sarine sold 34 of its Galaxy diamond-inclusion-mapping systems — one more than it sold in the first quarter, which was its previous record. However, those systems were for smaller stones, and have significantly lower gross margins than the models for larger stones, thereby failing to generate as much revenue.

Sarine will release its full financial report for the quarter on August 8.

Image: Sarine Technologies’ grading laboratory in Israel. (Sarine Technologies)
Tags: Galaxy, Rapaport News, Sarine, Sarine Technologies
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