Diamond Slump Hits Demand at Sarine

RAPAPORT... Sarine Technologies expects to report a loss for the second quarter, ascontinued market uncertainties led to lower demand for its diamond-manufacturing equipment. The net loss will be approximately $1 million, the companycautioned earlier this month, compared with a profit of $4.1 million for the same periodlast year. Sarine also predicted revenue of approximately $11.5 million, a 36%decrease from the $18 million it reported for the second quarter of 2018. Tightening creditin the manufacturing sector has led to lower sales in India, Sarine'slargest market, as customers there face liquidity issues, the company noted.The increase in popularity of lab-growndiamonds, as well as the US-China trade war, have also impacted sales, Sarine added. "All these factors adversely affected conditions in theindustry's midstream, and resulted in a reduction of the [company's] equipmentsales as well as recurring revenues from inclusion-mapping services," thecompany explained. Sarine sold 34 of its Galaxydiamond-inclusion-mapping systems - one more than it sold in the first quarter, which was its previous record. However, those systems were for smaller stones, andhave significantly lower gross margins than the models for larger stones,thereby failing to generate as much revenue. Sarine will release its full financial report for thequarter on August 8. Image: Sarine Technologies' grading laboratory in Israel. (Sarine Technologies)