Sarine Warns Polished Oversupply Will Hit Sales

RAPAPORT… Sarine Technologies’ revenue dropped significantly in the
third quarter as an oversupply of polished diamonds resulted in manufacturers
limiting production and spending less on equipment.


Sarine, which supplies technology
to the diamond-manufacturing sector, estimated that revenues amounted to just
over $11 million in the third quarter, implying a drop of about 36% from a year
ago, according to a company statement last week. It also expects to report an
operating loss of “several hundred thousand dollars.”


The industry often suffers from stock
excesses at the end of the second quarter or the beginning of the third as
cutters over-produce in the first half to fill retailers’ post-holiday
inventory gaps, the Israel-based company explained. This year’s oversupply was worse than usual, having
grown in the third quarter, it added.


Compared with the second quarter,
Sarine’s revenue fell about 40%, with roughly 75% of the decline attributable
to the market conditions, the company said. The rest of the drop was due to
alleged infringement of the company’s intellectual-property rights by other
parties and uncertainties resulting from related litigation, it explained.


Sarine will release full
third-quarter results on November 12.