Sarine Technologies Ltd, one of the leading diamond industry technology developers, announced significant declines in its financial figures in 2017, with total profits falling 68% to US$5.76 million and revenues down by 19% to US$58.6 million. The Singapore Exchange listed company explains that, "Sales of capital equipment was affected by the slowdown in diamond manufacturing activities amid higher than normal surplus inventories of polished diamonds in H2 2017 as well as illicit competition in India." Sarine Technologies filed a lawsuit against Indian manufacturer Rose Gems, alleging breach of contract and fraud, Sarine said on Sunday. The lawsuit, which also alleges copyright infringement, relates to activities Sarine initially reported last month. By illegally hacking into and manipulating Sarine’s Galaxy inclusion-mapping system, Rose Gems deliberately underreported the weight of the rough stones it scanned in order to underpay for use of the technology, Sarine said.
They note that with an installed base of 345 Galaxy® family systems as at 31 December 2017, total recurring income amounted to just under half of Group revenue. Overall polished diamond retail-related revenues, currently from Sarine Profile and its various components, represented 2% of Group revenue. They also noted that business picked up at the end of the year as sentiment in the diamond manufacturing sector improved somewhat towards the very end of 2017, leading to Sarine achieving revenues of US$12.9 million in Q4 2017, an improvement of 15% over Q3 2017. The increase was mainly attributed to higher sales of diamond manufacturing related capital equipment.
The company adds, "Despite challenging industry conditions and illicit competition, Sarine achieved the milestone of scanning over 10 million rough diamonds through its Galaxy® family of inclusion mapping systems in 2017." Mr. David Block, CEO of the Group commented, “Against the backdrop of significantly reduced De Beers sights, we believe this is indicative that we are not losing significant existing business and are expanding our customer base, illicit competition notwithstanding. Notably, as De Beers sights are now increasing, we are seeing a commensurate increase in our scanning activities, with new scanning records being set.” Going forward, the Group expects sentiments in the midstream industry to improve, as the year-end holiday season sales reduced inventories significantly. On the retail front, the Group’s target for 2018 is to double the number of stones scanned in 2017. On 18 February 2018, the Group also formally opened its new Sarine Technology Lab to provide the first ever technology-driven 4Cs diamond grading reports.