Manufacturing Rebound Buoys Sarine Sales

RAPAPORT... Sarine Technologies, which supplies equipment to the diamond-manufacturing sector, saw sales rise in the first quarter as cutters lifted production in response to strong retail demand.Manufacturers bought and processed large quantities of rough during the period as the diamond market recovered from last year's slowdown, Sarine said Monday. This supported demand for the company's rough-mapping technology, which generates revenue each time a client scans a stone.Group sales grew 5% year on year to $17.3 million for the three months ending March 31, while net profit came to $6.7 million, approximately double the figure for a year earlier.The positivity continued until India's recent coronavirus outbreak, which led to tightened restrictions from April onward - after the end of the first quarter."There is definitely the influence of the rebound and the market coming back strongly in the first quarter, high quantities of rough entering the pipeline, and aggressive manufacturing," Sarine CEO David Block said in an interview with Rapaport News. "Everything was hunky-dory until a month or so ago, when the crisis in India started again."The pandemic, which froze the market for parts of 2020, continued to restrict Sarine's ability to deliver machines. The company and its component suppliers had not yet returned to normal production levels following last year's disruptions, limiting sales of items such as its flagship Galaxy inclusion-mapping system.In addition to recurring revenues from customers using Sarine's technology, the company derives revenue from these one-off equipment sales."The demand was - in some areas - higher than our ability to supply," Block explained. "You can see that especially in our Galaxy system deliveries, where we only managed to deliver 12 systems in this quarter. That is not a representation of the market demand." The company sold 50 such machines in the same quarter a year earlier.Despite the latest Covid-19 wave, polished production in India has remained relatively stable because of buoyant retail appetite, Block added. Large-stone manufacturers have maintained their operational levels more successfully than cutters of small stones, he observed."We don't see such a dramatic impact in terms of manufacturing, [or] in terms of the desire of the manufacturers to continue manufacturing as much as possible within [their] capability [and] limitations," the executive commented.Image: A Sarine scanning machine at the company's laboratory in Israel. (Sarine Technologies)