Sarine Anticipates Return to Profitability

RAPAPORT... Sarine Technologies expects to register a "nominal" netprofit for the third quarter, as sales of mapping machines for small diamonds increasedamid a lessening of the midstream inventory crisis. The manufacturer of equipment for the diamond tradeforecast revenue of $14 million, representing 20% growth versus the $11.7million sales it reported for the same period a year ago. White total sales ofits inclusion-mapping technology remained subdued because of a decline inpolishing activity, demand for its Meteor and Meteorite systems for smallstones improved, the company explained in a recent trading update. "Back in the beginning of the year we told people wethought we'd be selling 90 such systems this year," Sarine chairman DanielGlinert told Rapaport News Thursday. But sales figures "are simply goingin a direction where we did not expect them to be so soon," he said. Glinertalso noted a "beginning of the easing of the inventory issue" that has hurt themanufacturing sector this year. Lower rough supply from miners such as De Beers hashelped reduce stockpiles and improve liquidity in the midstream, the companyadded. Customers are increasingly buying mapping equipment outright rather thanpaying according to usage, Glinert added. That has lifted Sarine's grossmargin, contributing to a likely return to profitability following two quartersof losses, he said. However, other negative market conditions prevailed, the Israel-based company cautioned. "The ongoing tradedisputes between the US and China continued to impair demand in the Chinesemarket by an estimated 10%," it said, adding that "the issue of lab-growndiamonds continued to be a distraction." Image: Sarine Technologies headquarters in Hod HaSharon, Israel. (Sarine Technologies)