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