Sarine Sales Slip in Slower Diamond Market
Sarine Technologies’ revenue and earnings fell in the first half of 2022 as market pressures around the world dented demand for the company’s manufacturing equipment.
Sales dropped 13% year on year to $13.2 million, the Israeli-based company reported Monday. Profit slumped 48% to $6.5 million.
Sarine, which supplies machinery to the diamond-manufacturing industry, saw a 30% drop in sales of capital equipment — one-off purchases of machinery — because of geopolitical uncertainties, especially sanctions on rough from Russia’s Alrosa, the company explained. However, “recurring revenues” — fees clients pay on a regular basis, such as for diamond scans — rose 22%. This partly reflected increased activity in the company’s “trade” segment, which encompasses provenance tools and other similar services.
The six months were “affected by uncertainties stemming from the hostilities in…Ukraine, which commenced in late February, the renewed outbreak of Covid-19 in China with the ongoing policy of lockdowns ordered there, and an inflationary economic environment,” the company commented. “Sanctions impacted the flow of rough diamonds from Russia into the value chain in April and May, with decreasing impact from June onwards.”
The downturn also reflected an unfavorable comparison with the strong market recovery that occurred a year earlier.
Meanwhile, China’s Covid-19 policy is causing supply-chain issues, some of which are affecting Sarine’s own suppliers, it pointed out. In addition, while consumer demand is strong, inflation in the US “may have a further dampening effect going forward,” it continued.
Image: A polished diamond under inspection. (Sarine Technologies)