Sarin Posts Soaring Revenues and Profits in Q3

(IDEX Online News) –Sarin Technologies reports revenue growth of 48 percent to $17.3 million for the third quarter ended September 30 due to increased income from its Galaxy^TM machines that achieved a broader installed base compared to the year-earlier quarter.

During the third quarter, Sarin delivered five Galaxy family systems to customers and overall group recurring revenue increased by over 50 percent versus the third quarter of 2012. However, third quarter 2013 revenue was lower than that of the second quarter 2013 due to a slowdown in Indian manufacturing activity.

The slowdown was due to the weakening of the Indian rupee against the U.S. dollar and the associated directives of the Reserve Bank of India, tightened credit lines available to Indian diamond manufacturers and a squeeze in manufacturers’ margins on the back of high rough diamond prices, Sarin reported.

Net profit before one-off tax on exempt profits for prior periods jumped 124 percent on a year before to $5.7 million.

For the nine-month period, Sarin reported record revenues and net profit before one-off tax on exempt profits for prior periods of $59.7 million and $22.0 million respectively. Group revenue registered a healthy 21 percent increase on the back of improved business conditions in the first six months of the year and higher Galaxy-related income from a broader installed base.

During the period, the total installed base of Galaxy family products increased to 127 and overall recurring revenue amounted to over 30 percent of total sales. In addition, the group also posted initial revenue from the commercialization of Sarine Light^TM prospects.

"With the major economies of the US, Japan, Europe and China showing varying degrees of growth, the macroeconomic environment is expected to remain positive for the rest of the financial year. In spite of the challenging conditions in the diamond manufacturing industry in India, the group’s sales and profitability remained robust in Q3 2013. This once again vindicates our strategy to focus on recurring revenue models which helped to mitigate the volatility associated with the sales of capital equipment,” commented CEO Uzi Levami.

Sarin said that following the launch of Sarine Light in Japan with retail jewelry chain CIMA, other Japanese retailers have placed orders, and Sarin has delivered systems to additional customers in Japan, who have already begun issuing Light Performance reports.

It will launch Sarine Light in additional markets in the Far East, initially Hong Kong, Taiwan and Korea, as well as starting to market to high-end diamond jewelry retailers in the U.S. early next year.

The firm's product pipeline includes the Galaxy Ultra and Sarine Loupe, and the process aimed at their commercialization can be expected to begin after the Indian Divali holiday.