Lower Sales Hit Sarine's Profits
March 01, 23
(IDEX Online) - Sarine has reported a fall in net profits for FY2022, down just over 46 per cent from $16.5m to $8.8m.
It also said revenue for the year were down by 5.4 per cent, from $62.1m to $58.8m, down from a high base in H1 2021 due to post-Covid spike in US jewelry spending.
Sales to India, its biggest market by far, fell 25 per cent from $40.5m to $30.3m.
The Israel-based diamond tech firm blamed lower sales, and a change in product mix due largely to the rollout of its lower-margin Meteorite Plus scanner (pictured) for rough stones of 40 points and below.
"Profitability was further affected with the overall increase in operating expenses as activities returned to normal in a post Covid era, and higher tax expenses associated with a one-time repatriation of funds from the group's wholly owned Indian subsidiary," it said in a statement.
Market conditions were challenging throughout most of the year, it said.
"Negative geopolitical developments, commencing with the onset of the war in Ukraine, an inflationary economic environment with dramatically increasing interest rates and the zero-Covid policy related lockdowns in China resulted in equity market and housing value losses.
"Consequently, household wealth was eroded in many key markets, and the overall negative effect on consumer confidence impaired business conditions in the discretionary diamond jewellery value chain."
Geopolitical uncertainties are expected to continue into 2023, it said, but the abrupt end of the zero-Covid policy in China was rebooting its demand for polished diamonds.