SINGAPORE (May 14): Sarine Technologies, the manufacturer of equipment for the evaluation of diamonds and gemstones, reported a 27% rise in 1Q18 earnings ended March to US$3.1 million ($4.1 million) from a year ago on higher sales and operating expenses.
In 1Q18, Sarine recorded 2.4% higher revenues of US$16.7 million from last year although recurring revenues continued to climb even as the quantities of rough stones entering the pipeline declined by 10%, compared to 1Q17.
Growth in revenue on a sequential quarterly basis was driven by higher equipment sales and increased recurring income, reflecting 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 31, overall recurrent income represented about 45% of group revenue.
Polished diamond retail-related revenue segment accounted for 2% of revenue in 1Q18. Buoyed by higher sales, gross profit rose to US$11.4 million and gross profit margin improved to 68%.
Following the completion of major development efforts for Sarine Clarity, Sarine Color and Sarine Journey, the group saw lower research and development costs in 1Q18.
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 normalised level in 1Q18 as the tax expense in 1Q17 included writedowns of certain deferred and other tax assets.
In its outlook, 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.
K-Uno, a key high-end Japanese retailer, announced in mid-April the adoption of the group’s first artificial-intelligence-based 4Cs diamond reports following its launch in Feb 18.
Shares in Sarine closed 1 cent higher at $1.06 on Monday.