Sarine Technologies, which has dual-listing on the Singapore Exchange (SGX) Mainboard and Tel-Aviv Exchange, has posted net profit of US$1.9 million ($2.6 million) for the 3QFY2021 ended September.
The group’s revenue for the quarter stood at US$12.1 million.
Gross margin stood at 76% due to its product mix.
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According to the group, its results were affected by the seasonal slowdown and uncertainties in the industry after the exceptional 1HFY2021.
The summer months in general, particularly August, see the shutting down for vacations of most polished trading centres.
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In 2021, the Jewish New Year as well as the holidays of the Day of Atonement and Feast of Tabernacles have reduced the number of effective working days to fewer than 10 in trading centres.
In addition, developing circumstances in China related to the “common prosperity strategy” adopted by the government have created uncertainties pertaining to the Chinese luxury market.
Furthermore, the pricing of rough diamonds, which saw a rapid increase during the first half of 2021, has slowed or halted, or reversed in certain categories on the backdrop of increasing inventories of polished stones.
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The corresponding increase in polished diamond prices has impaired the midstream polishing sector’s profitability.
Looking ahead, the group expressed its excitement by the ongoing developments in the adoption of its Sarine Diamond Journey™ provenance and traceability solution by high-end luxury brands. Programs for leading luxury brands are expected to roll out in 2022.
In the short-term, the group is positive that it will see a robust end-of-year holiday season in the US.
“Expectations are also for a strong holiday season in the APAC market as well, though uncertainties pertaining to the Chinese market do persist,” says the group in a Nov 14 statement.
“The main concern currently is, once again, the disparity between rough diamond price increases (20% y-o-y) and polished diamond prices, which have seemingly peaked as inventories have been replenished,” it adds.
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As at 9.07am, shares in Sarine are trading 7 cents lower or 10.07% down at 62.5 cents.
Photo: Stock image