Sarine announces financial results for Q1 2017

Increased capital equipment sales and higher recurring revenues helped it clock higher revenues
Sarine announces financial results for Q1 2017

Sarine Technologies Ltd announced its financial results for the first quarter ended 31 March 2017. Backed by healthy level of manufacturing activities in the diamond industry, the company clocked higher revenue of US$16.3 million, from increased capital equipment sales and higher recurring revenues.

Group revenue although dipped on a sequential quarterly basis due to fewer GalaxyTM deliveries following the termination of the MeteorTM promotion at attractive introductory terms as of the end of December 2016 and other issues. The Group delivered 17 GalaxyTM family systems to customers in Q1 2017, bringing the total installed base to 316 as of 31 March 2017.

Overall recurring income accounted for approximately 42 percent of total revenue, with trade revenue derived from the polished diamond line of products and services representing about 2 percent of total revenue in Q1 2017.

Gross profit was up 6 percent to US$11.1 million and gross profit margin remained stable at 68 percent. In order to support continued growth and the launch of new services, higher operating expenses were incurred in Q1 2017. The increase in expenses was compounded by the 5% strengthening of the Israeli NIS against the US dollar. As a result, profit from operations fell 14% from US$3.7 million in Q1 2016 to US$3.2 million in Q1 2017. The Group registered a drop in Q1 2017 net profit to US$2.5 million. The company notes that positive business conditions in the diamond industry are likely to persist in FY2017, yet the Group will continue to monitor market developments closely. The market penetration of Sarine ProfileTM continues to grow, especially in the Asia Pacific (APAC) region. “We have a number of significant successes in the APAC region and the list of new customers include two new chains in Japan, K-Uno and Sadamatsu, and a large buyers’ group in Australia, Leading Edge Group,” commented Mr. David Block, the Group’s newly appointed CEO. “We intend to double the number of stones scanned for Sarine ProfileTM in 2017 and expect its contribution to account for around 5 percent of group sales this year,” added Mr. Block.

Sarine is also working on its new technologies for Clarity and Colour grading for polished diamonds for the US$500 million a year 4Cs grading market. These technologies are currently undergoing large scale testing in India and the Group expects the commercialisation of these new services in Q3 2017.


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