Sarine Revenue Benefits from Addition of Synthetic-Diamond Services 

Sarine Technologies saw an increase in profit in the first half of the year, amid a significant reduction in costs and higher recurring revenues from the addition of new services for synthetic diamonds.   

Profit rose 7% year on year to $1 million in the six months that ended June 30, the Israel-based producer of technology for the diamond industry reported Monday. Overall sales slipped 8% year on year to $21.9 million. The decrease was the result of a 37% decline in sales of traditional capital equipment, due to “less-than-favorable conditions for natural-diamond manufacturing,” Sarine noted. However, an increase in recurring revenues, which comprise more than 70% of overall revenue, partly offset that drop. 

Recurring revenues — from fees clients pay when they use Sarine systems, such as its Galaxy rough scanners — grew 11% as the company introduced some new initiatives at the start of the year. Those included the adaptation of Sarine’s rough-planning technologies for use with synthetic diamonds, as well as the opening of a lab in India primarily to service the country’s “significant” synthetic industry, the company explained. 

“Revenues from lab-grown diamond services in the first half grew significantly, and we believe we are on target to generate 15% to 20% of annual revenues from this segment by year’s end,” Sarine said. “Although near-term challenges persist in the rough-diamond market, our strategic initiatives are designed to foster long-term growth and a stronger market position for Sarine as we expand our services offerings for both the natural-stone and lab-grown diamond markets.”

The company believes revenue will rebound in the long term as the oversupply diminishes and appetite for synthetics decreases due to falling prices. However, its short-term prospects remain weak. 

“The near-term demand for rough natural diamonds is likely to remain soft, with subdued manufacturing activities,” the company noted. “However, demand is expected to improve…[as] the lab-grown diamond market is experiencing rapidly and sharply declining wholesale and retail prices. With much lower absolute profits generated…there are indications of a renewed focus on natural diamonds. We expect this…to rekindle demand for rough natural diamonds and promote the anticipated equilibrium between two segments.” 

Image: The Sarine clarity system. (Sarine Technologies)

Stay up to date by signing up for our diamond and jewelry industry news and analysis.

This Content is Restricted to Rapaport Members

To access it, Log in to your Rapaport Account or Become a Member

Sarine Revenue Benefits from Addition of Synthetic-Diamond Services 

Top Stories from Rapaport

Featured