Sarin’s Q3 revenues drop 26%

At the close of the quarter ending September 30, 2012, Sarin Technologies Ltd., noted a 26 percent drop (on y-o-y basis) in its revenues to US$11.7 million, while its net profits dropped 41 percent (on y-o-y basis) to US$2.5 million. The company identified factors of unfavourable market conditions having affected manufacturing activities, and as such, impacting its revenues.

Rising prices of diamonds, reduced consumer spending, impacted profitability of the diamond manufacturer. According to Sarin, the Indian market, which is its primary consumer, grappled also with restricted working capital credit lines, thus slowing down its manufacturing activities and capital investment in Q3 2012.

During Q3 2012, the Group delivered five GalaxyTM family systems to customers, increasing the installed base of GalaxyTM systems to just under 90 systems. GalaxyTM related recurring revenue improved nearly 30 percent (on y-o-y basis). Total Group recurrent revenue accounted for over a third of the total revenue for the quarter.

“The Q3 2012 results vindicate our strategy of focusing on recurring revenue models, rather than one-off capital equipment sales, as the quarter evidenced how this strategy has helped us to somewhat mitigate the volatility associated with the sale of capital equipment,” commented Mr. Uzi Levami, Chief Executive Officer of the Group.

For the period ahead, the company noted that there are signs of improving economic conditions in China and the US and renewed purchasing activity of polished diamonds by wholesalers and traders, and a rebound in diamond manufacturing in India. Although the economic challenges in Europe continues. The company is maintaining a cautious outlook ahead. It has planned launching new products and services with recurrent revenue models.