Sarine Posts 27% Rise in Net Profit to $3.1 Million in Q1 FY2018May 14, 18
(IDEX Online) – Sarine Technologies said that in Q1 2018, it recorded higher revenues of $16.7 million.
Although year-on-year improvement was marginal, it was "still noteworthy as recurring revenues continued to climb even as the quantities of rough stones entering the pipeline declined by 10%, compared to the corresponding period in 2017.
"The significant growth in revenue on a sequential quarterly basis, driven by higher equipment sales and increased recurring income, reflects renewed robust activities in India’s midstream diamond manufacturing sector. During the quarter, the Group delivered 12 Galaxy family systems to customers, comprising 5 of the new Meteorite model, 5 of the Meteor model, one Galaxy and one Galaxy XL. Notably, all but the Galaxy XL were delivered to customers in India, indicative of the group's growing containment of the illicit competition's activities.
With the installed base of Galaxy family systems expanded to 357 units as of 31 March 2018, overall recurrent income represented about 45% of group revenue. Polished diamond retail-related revenue segment accounted for 2% of revenue in Q1 2018.
"Following the completion of major developmental efforts for Sarine Clarity, Sarine Color and Sarine Journey, the group saw lower research and development costs in Q1 2018. However, general and administrative expenses were higher due to third-party professional fees related to ongoing IP protection activities. Income tax expense was significantly lower and at a normalized level in Q1 2018 as the tax expense in Q1 2017 included write-downs of certain deferred and other tax assets. With higher revenue and well-managed operating expenses, net profit for the period rose 27% to $ 3.1 million.
"The Group expects to continue to accelerate the expansion of sales programs utilising Sarine Profile with a goal to double the number of stones scanned in 2017 in 2018. Following its active marketing efforts, the Group is acquiring numerous new customers in the Asia Pacific (APAC) region as well as initiating new and expanded programs with existing customers.
Following the opening of the Sarine Technology Lab on 18 February 2018 to provide the first-ever technology-enabled artificial-intelligence-based 4Cs diamond reports, K-Uno, a key high-end Japanese retailer, announced in mid-April the adoption of the Group’s new reports. This unique ground-breaking solution provided by the Group has been met with enthusiastic market response. Additional key retailers in the APAC market are planning on launching programs adopting Sarine's reports, as soon as the necessary logistics infrastructure is put in place.
“To support our customers who will be launching programs with our reports in Q2 and Q3 2018, we are opening a second lab in India, close to our customers' suppliers, in May 2018,” said David Block, CEO of the Group. "With the new Indian lab, the Group will have the increased capacity and the necessary accessibility to meet the demand from these additional higher-volume retail customers."