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Sarine Technologies Swings to Loss in 3Q as Revenue Plummets 53%

Nov 9, 2015 8:57 AM   By Rapaport News
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RAPAPORT... Israel’s Sarine Technologies, a diamond manufacturing equipment maker, reported revenue more than halved in the third quarter as higher prices of rough and increased polished inventory damped business activity. The company swung to a loss in the three months.

Sales dived 53 percent to $9.5 million in the period to September 30, the company said in a statement November 8. Loss incurred was pegged at $1.4 million, compared with a profit of $5.7 million a year ago. The operating loss of $705,000 was about half the size of the $1.5 million operating deficit Sarine guided October 1.

Revenue from India, the largest contributor to sales, plummeted 64 percent to $6 million. In Israel, the drop was 35 percent to $768,000 and in Africa it was 32 percent to $547,000, according to the company. Results were particularly affected by the high rate of refusals at De Beers’ July sight, at 60 percent to 70 percent of rough diamonds offered.

The De Beers sight in August and ALROSA tender in September, where trading was about 50 percent below the typical level, were also disappointing. Lower than anticipated revenue from the Galaxy diamond-mapping technology and a squeeze on working capital from a slower inventory turnaround were detrimental to results. Sarine said polished output was 40 percent to 50 percent below the typical production threshold during most of the third quarter, “all but negating the need for capital equipment investment” and further impairing processing fees from Galaxy.

While revenue from North America fell 31 percent to $265,000, it said, sales in Europe advanced 25 percent to $394,000. Revenues from other regions – mostly Asia, excluding India – jumped 18 percent to $1.6 million.

Revenues for the first nine months slumped 48 percent to $36.1 million year-on-year, with profit chopped by 91 percent to $2.1 million, according to the statement.

Separately, Sarine said it opened its first service center to provide automated gemstone planning and shaping services. It is located in Jaipur, India, and will be operated by the company's Indian subsidiary.

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Tags: data, Israel, Rapaport News, Sarine Technologies, technology
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