Weak Market Drives Sarine to Loss

RAPAPORT... Sarine Technologies reported a loss in 2019, as soft demand in the first nine months outweighed a stronger fourth quarter.The diamond technology company reported a net loss of $1.4 million for the year, compared with a profit of $7.6 million in 2018. An oversupply of rough in the midstream, civil unrest in Hong Kong and tighter bank credit to India's manufacturing sector resulted in lower polishing activity and reduced recurring revenues from the company's equipment, Sarine explained Sunday. Revenue for the period declined 12% to $51.3 million. Sales in India, Sarine's largest market, fell 8% to $36 million for the year, while those in Israel slumped 14% to $2.9 million. Sales in North America, the only region to see growth in 2019, more than doubled to $2.4 million, compared with $1 million the year before. Revenue for the fourth quarter jumped 20% to $14.6 million, as the market improved and the company sold a higher number of Galaxy systems compared to the previous year. Profit surged to $1.2 million, versus $93,000 for the same period in 2018.While the coronavirus has not yet affected Sarine, the company warned it could have an impact."The recent outbreak of the coronavirus has cast some uncertainty over retail market sentiments in China, the second-largest market for polished diamonds globally, and as the effects of the disruption are still not clear, the group is monitoring the situation closely," Sarine noted.Image: Sarine Technologies' grading laboratory in Israel. (Sarine Technologies)