News Bureau

 
 
May 20, 2022

No Impact from Geopolitical Uncertainties in Q1: Sarine

Sarine Technologies updates its investing public on business conditions during Q1. Geopolitical uncertainties stemming from the hostilities in the Ukraine, which commenced in late February, and the renewed outbreak of Covid-19 in China with the resulting lockdowns ordered there, generated uncertainties that had minor negative impact on the Group's business environment in the first quarter of 2022.

Sanctions notwithstanding, the flow of rough diamonds into the value chain, including those of Russian origin, continued unabated in the first three months of 2022. Midstream polishing activities were commensurately robust, as evidenced by the utilisation of our inclusion mapping systems, which continued throughout the first three months of 2022 on levels similar to those realised in late 2021, with averages exceeding 100,000 stones daily.

On the backdrop of these overall positive business conditions, the Group realised revenues of US$15.6 million in the first quarter of 2022, only 9.9% less than our exceptionally strong first quarter of 2021, with a robust gross margin of 71.8%. Trade of rough and polished diamonds related revenues accounted for 11.6% of overall revenues.

With all our activities now nearly back to pre-pandemic levels, and our General and Administrative expenditures even above normal due to increased legal and other expenses related to our IP enforcement and litigation in India, our profit from operations was just under US$ 4.0 million, and, with ongoing beneficial tax rates, our net profit was just under US$ 3.4 million.

Cash and short-term deposits surged to US$ 41.7 million at quarter's end, with zero borrowings.

Receivables decreased modestly from 2021 year's end to US $22.7 million, with most due receivables having been collected we delivered 17 Galaxy-family systems in the first quarter. The breakdown by model was one Galaxy® Ultra, five Galaxy models, two Meteors and nine Meteorites, with nine of the latter two categories sold under the one-off business model with no follow-on per-use revenues.

As of 31 March 2022, our installed base was 728 Galaxy-family systems. As detailed in our Annual Report, we are striving to enhance the value proposition of our Galaxy/Advisor offerings, with special focus on the vast small-stone segment of the value chain.

We have already launched our new Advisor 8 software, with many new optimised features and the best ever productivity, and we are working on ways to improve the cost-effectiveness of our scanning systems specifically for small stones, primarily through the reduction of their operational overhead.

To further our support of our midstream customers, we introduced this quarter a first-ever rough diamond documentation and appraisal service, to address the need for a reliable means to finance and insure rough diamonds.

 

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