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Sarine’s Revenue Plummets 42% in 2Q as Demand in Key Markets Weakens

Aug 11, 2015 9:31 AM   By Rapaport News
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RAPAPORT... Sarine Technologies Ltd., a diamond manufacturing equipment maker and bell weather for the industry, reported a 42 percent plunge in its second-quarter revenue as demand for polished in its key markets weakened and rough prices rose.

Sales plummeted to $14.4 million during the three-month ended June 30, dragging the company’s net profit for the quarter to $2.7 million, a 69 percent drop from a year ago. Recurring sales, which account for about half of Sarine’s operating revenue, slid 20 percent, the company said in a statement released on on Sunday.

Revenue fell on weak demand for polished in most markets including East Asia, excess polished inventory combined with relatively high rough prices and lower polished prices dampened sentiment among diamond manufacturers.

Sales from India, Sarine’s largest market, dived 48 percent to $10.6 million, with sales dropping sharply in Israel and Africa as well. In contrast, sales jumped 94 percent to $557,000 in North America and surged 128 percent to $717,000 in Europe, two regions known for almost exclusively polishing large size diamonds.

Sarine said it delivered six of its Galaxy family of products, which are used for mapping rough diamonds during the polishing process, bringing its installed base to 201 systems.

Industry observers look at the company’s results as an indicator of the overall health of the diamond market because its revenue is generated from the sale of new equipment and recurring usage fees

Sarine noted in its outlook that polished demand in Japan, the Middle East and Russia remained subdued. Meanwhile, China's faltering economy and anti-corruption activities continued to cut demand for polished diamonds in Hong Kong and, to a lesser degree, in the Mainland. However, the company noted that the U.S. market, the world’s biggest consumer of polished demands, is showing some signs of growth. This, and an improvement in global economic indicators, signal to the company that global polished demand for the whole of 2015 is unlikely to be worse than in 2014.
Tags: equipment, Galatea, Galaxy, Manufacturing, Rapaport News, Ronen Shnidman, Sarin, Sarine, Sarine Technologies
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