Sarine’s Q1 Net Profit Up 27% To $3.1 Mn
Sarine Group recorded higher revenues of $16.7 million in Q1 2018. Year-on-year improvement was marginal, but is 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 five of the new Meteorite™ model, five 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 March 31st, 2018, overall recurrent income represented about 45% of Group revenue. Polished diamond retail-related revenue segment accounted for 2% of revenue in Q1 2018.
Buoyed by higher sales, gross profit rose to US$11.4 million and gross profit margin improved to 68%. 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 programmes utilising Sarine Profile™ with a goal to double the number of stones scanned in 2017 this year. 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 February 18th, 2018 to provide the first-ever technologyenabled 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 groundbreaking solution provided by the Group has been met with enthusiastic market response. Additional key retailers in the APAC market are planning on launching programmes adopting Sarine’s reports, as soon as the necessary logistics infrastructure is put in place.