Sarine Technologies Ltd full year report mentions that the market conditions were challenging throughout most of FY2022 due to negative geopolitical developments, an inflationary economic environment and the overall negative effect on consumer confidence impaired business conditions in the discretionary diamond jewellery value chain.
In addition, the price increases of rough diamonds throughout 2022 by a cumulative average of 35% combined with decline in the prices of polished diamonds in 2022 resulting in impaired margins in the polishing segment and a higher inventory of polished diamonds. This reduced the level of diamond manufacturing in Q4 2022 in general, and especially so for the larger more expensive rough stones. With reduced manufacturing, the Group’s revenue from Galaxy® scanning was lower in H2 2022, says a press release from the company.
Despite these challenges, the Group revenue rose 5.5% to $27.6 mn in H2 2022 mainly on higher sales of capital equipment due to the successful roll-out in September of the upgraded Meteorite™ Plus. However, full year FY2022 revenue declined 5% compared to FY2021 due to a high base in H1 2021.
With lower revenue and a change in product mix, gross margin in FY2022 declined to 69%. The product mix effect was mainly due to the rollout of the lower-margin Meteorite™ Plus. Profitability was further affected with the overall increase in operating expenses as activities returned to normal in a post Covid era, and higher tax expenses associated with a one-time repatriation of funds from the Group’s wholly owned Indian subsidiary.
Despite lower inclusion scanning revenues in H2 2022, overall recurring revenues rose to 50% of Group revenue in FY2022, as compared to 46% in FY2021. Trade revenues, the new sources of recurring revenues, continued to grow strongly in FY2022 to account for about 11% of Group revenue.
The Board of Directors has declared a final dividend of US 1.0 cent, the third dividend for FY2022. With three dividends, the Group will have paid out about $10.5 mn in FY2022 against $ 8.8 mn in FY2021, exceeding somewhat the net profit of the Group for the full year.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
In addition, the price increases of rough diamonds throughout 2022 by a cumulative average of 35% combined with decline in the prices of polished diamonds in 2022 resulting in impaired margins in the polishing segment and a higher inventory of polished diamonds. This reduced the level of diamond manufacturing in Q4 2022 in general, and especially so for the larger more expensive rough stones. With reduced manufacturing, the Group’s revenue from Galaxy® scanning was lower in H2 2022, says a press release from the company.
Despite these challenges, the Group revenue rose 5.5% to $27.6 mn in H2 2022 mainly on higher sales of capital equipment due to the successful roll-out in September of the upgraded Meteorite™ Plus. However, full year FY2022 revenue declined 5% compared to FY2021 due to a high base in H1 2021.
With lower revenue and a change in product mix, gross margin in FY2022 declined to 69%. The product mix effect was mainly due to the rollout of the lower-margin Meteorite™ Plus. Profitability was further affected with the overall increase in operating expenses as activities returned to normal in a post Covid era, and higher tax expenses associated with a one-time repatriation of funds from the Group’s wholly owned Indian subsidiary.
Despite lower inclusion scanning revenues in H2 2022, overall recurring revenues rose to 50% of Group revenue in FY2022, as compared to 46% in FY2021. Trade revenues, the new sources of recurring revenues, continued to grow strongly in FY2022 to account for about 11% of Group revenue.
The Board of Directors has declared a final dividend of US 1.0 cent, the third dividend for FY2022. With three dividends, the Group will have paid out about $10.5 mn in FY2022 against $ 8.8 mn in FY2021, exceeding somewhat the net profit of the Group for the full year.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
