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India Credit Slowdown Squeezes Sarine Profit

May 20, 2019 8:02 AM   By Rapaport News
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RAPAPORT... Sarine Technologies posted a loss in the first quarter as credit problems in the Indian manufacturing sector led to softened demand for its equipment.

The diamond-technology company reported a net loss of $1.4 million, versus a profit of $3.1 million for the same period last year, the company said last week. The company’s customers in India, its largest market, struggled to obtain credit from banks, leading to lower polished production. In addition, the lenders required some of the credit already extended to be returned by March 31, the end of the Indian fiscal year.

Revenue for the period fell 34% to $10.9 million, with sales in India dropping 48% to $7 million for the January-to-March period. That decrease outweighed a 58% increase to $1.3 million in Africa, Sarine’s second-largest market. North American sales rose 12% to $313,000, while revenue in Israel slumped 43% to $606,000.

Although Sarine sold a record 33 of its Galaxy diamond-inclusion-mapping systems in the first quarter, those were for smaller stones, and have significantly lower gross margins than the models for larger stones, thereby failing to generate as much revenue, Sarine noted.

Recurring revenue from Galaxy services, including annual maintenance contracts and spare parts, accounted for 55% of total revenue. Custom reports, such as Sarine Profile and Sarine Light, made up just under 3%.

Growth in the man-made-diamond industry has affected the natural market, Sarine observed. However, the company emphasized its diamond-inclusion-mapping technology and diamond reports are also applicable to synthetic diamonds. 

Image: The Sarine Galaxy. (Sarine Technologies)
Tags: cvd, David Block, Galaxy, HPHT, lab-grown diamonds, Rapaport News, Sarine, Sarine Light, Sarine Profile, Sarine Technologies
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