Reporting its financial results for the quarter and the nine months ended September 30, 2019 (Q3 FY 2019/9M 2019) Sarine Technologies Ltd  announced that in Q3 FY 2019, the Company had returned to profit on a sequential quarter-on-quarter basis, on the back of a revenue of US$ 14.165 million earned for the quarter; as compared to US$ 11.702 million earned for the same period of the previous year. The Group’s revenue for the prior quarter, Q2 FY 2019, was US$ 11.597 million.

“On a sequential quarterly basis, Group revenue in Q3 2019 rose 22% over Q2 2019, and the net loss of US$ 1.4 million reversed to a net profit of US$ 0.2 million,” Sarine said in its announcement.

Sarine’s profit for Q3 FY 2019 amounted to US$ 0.234 million, as compared to a profit of US$ 0.269 million declared for the same period of the previous year. The Group had incurred a loss of US$ 1.406 million for Q2 FY 2019. The Company iterated that though the profit for Q3 FY 2019 “was 13% lower compared to Q3 2018” it was “significantly better than the net loss of US$ 1.4 million reported in Q2 2019”.

Describing the environment within which the results had been achieved, Sarine said: “The Group’s operating environment continued to be challenging in Q3 2019. Midstream activities remained subdued with the same issues continuing to impair diamond polishing activity, namely credit tightening policies imposed by Indian banks, albeit less an issue somewhat in Q3 as compared to H1 2019, excess inventory issues eased due to less rough stones entering the production pipeline, dampened consumer sentiments in the Chinese and Hong Kong markets arising from the ongoing trade disputes with the U.S. and civil unrest, and distractions caused by lab-grown diamonds (LGD).”

However, the Company underlined that despite the many challenges, the Group has managed to achieve “significantly higher capital equipment sales”. These included its Galaxy®-family inclusion mapping systems, “a significant portion” of which were one-off sales. “(The) Record deliveries of 39 Galaxy® family systems to customers in India expanded total installed base to 516 as of 30 September 2019,” the Company stated.

“Another record total of 39 Meteor™ and Meteorite™ systems were delivered to customers in India during the quarter, bringing the total installed base of Galaxy® family systems to 516 as of 30 September 2019,” Sarine enumerated. “This improvement was offset by reduced recurring revenues from inclusion mapping activities due to a significant decline in the quantities of rough diamonds entering the pipeline.”

For the 9M 2019, Group revenue fell 21% to US$ 36.7 million, of which over 50% were recurrent in nature. Overall polished diamond retail-related revenues were just under 3% of overall revenue in 9M 2019. “Due to the losses in the first two quarters under tough industry conditions, the Group recorded a net loss of US$ 2.6 million in 9M 2019,” Sarine stated.

Affirming that its technology enjoys good market penetration despite difficult conditions, Sarine said that the Group will continue “to invest in its long-term goal of building a significant portfolio of products and services for polished diamonds wholesale and retail trade”.

Sarine noted that in October ALROSA launched Digital Tenders providing Galaxy® scans and additional information to enable more efficient decision making on the procurement of their offered rough diamonds.

Further, the Company stressed, it had signed a strategic cooperation agreement with China’s largest gemmological laboratory -- NGTC.

“Building on this positive momentum, we have selectively added new sales personnel to further develop our markets in China, Japan, the ASEAN countries, India, Australia and the United States. Significantly, we are working with Tiffany & Co. to adapt our automated artificial intelligence (AI)-based grading technology to Tiffany’s stringent grading guidelines and criteria,” said David Block, the CEO of Sarine Technologies. “As we continue to develop our base of retailers, we are also adding midstream manufacturers participating in our Journey Official Partners Program. The 30,000 high quality Journey ready stone inventory is expected to increase rapidly as our manufacturing partners scale up production, creating a ready pool of stones for retailers to select for their Journey initiatives.”