(IDEX Online) - Sarine Technologies Ltd announced its financial results for the second quarter and half year ended 30 June.
In Q2 2018, group revenue remained stable on a y-o-y basis at US$18.0 million. On a sequential quarterly basis, this translated to an increase of 8% over the sales of US$16.7 million in Q1 2018. This improvement was mainly due to substantially higher diamond manufacturing equipment sales, in particular the Galaxy family systems.
During the quarter, the Group delivered 20 Galaxy family systems to customers, comprising 8 of the new Meteorite model, 6 of the Meteor model, a Solaris system, 4 Galaxy systems and a Galaxy Ultra machine. Notably, all of the systems for smaller stones were delivered to customers in India while the Galaxy Ultra and three of the Galaxy systems were delivered in Africa. As of 30 June 2018, Sarine's installed base of Galaxy family systems grew to 377.
In H1 2018, the Group recorded revenue of US$34.6 million, of which over 42% was recurrent in nature. During this period, Sarine noted significant revenue growth of just under 25% from its polished diamond retail-related business (growth of 33% in Q2 2018 compared to same period y-o-y).
Due to the impact of a change in product mix on the profitability of the Group's subsidiaries, as well as the write-downs of certain deferred and other tax assets in 2017, income tax expenses were lower. As a result, net profit rose 28% to US$4.1 million in Q2 2018. On a sequential quarterly basis, the improvement was 33% over the net of profit of US$3.1 million in Q1 2018. For H1 2018, net profit totaled to US$7.2 million, an increase of 27% over the previous corresponding period.
Prospects
Sales programs utilizing Sarine Profile continued to expand in the Asia Pacific (APAC) region with new and expanded programs being initiated with existing and new retailers. In order to provide retailers in Japan with easier access to Sarine Profile reports, a new service centre will be launched there to support the Group's further expansion in Japan. The Group is currently finalizing preparations for its launch later this month.
Besides Japan, the Group is also intensifying efforts to expand its market presence in mainland China. At the invitation of the Guangzhou Diamond Exchange, the Group opened its ninth Galaxy service centre in Guangzhou in July 2018 to service the rough diamond trade and diamond manufacturers in China. To accelerate its penetration into the Chinese polished diamond retail market, the Group is creating awareness for sales programs utilizing Sarine Profile through various Chinese social media platforms, including WeChat, Baidu, Weibo, etc.
In addition, the Group will be releasing a major upgrade to its IT infrastructure in Q3 2018 so as to offer customers in China the same levels of accessibility and performance as provided globally.
Following the opening of the first Sarine Technology Lab in Israel in February 2018, the Group opened its second Sarine Technology Lab in Mumbai in May 2018. "With the new lab in Mumbai, we can now provide, on a commercial scale, our AI-enabled 4Cs diamond reports directly to polished diamonds manufacturing in India," commented Sarine's CEO, David Block. "After K-Uno, a key high-end Japanese retailer, announced the adoption of our new reports in mid-April, other retail customers have also expressed interest and are learning about our automated, consistent and objective AI-based grading paradigm. Several chains in Asia are currently running trial analyses of our grading technologies with an aim to adopt our unique ground-breaking solution," added Block.