Sarine Technologies records best quarterly revenue since 2014; but Covid outbreak in India is creating uncertainties

MAINBOARD-LISTED Sarine Technologies posted a revenue of US$17.3 million in the first quarter of 2021 - its best quarter since 2014, it said in a business update on Sunday.

With operational activities not at full throttle and commensurately lower expenditure, its operational profit was US$7.3 million. After beneficial tax rates, its net profit was US$6.7 million.

The company, which makes equipment for diamond producers and sellers, said that its research and development, and general and administrative activities are nearly back to pre-pandemic levels. However, it is still spending some 25 per cent less on sales and marketing, as pandemic-related restrictions still hamper travel; and trade shows have not yet commenced.

Cash and short-term deposits were back to US$35.1 million at the end of the first quarter, against which the group has pandemic-related Israeli-government-subsidised bank loans of US$3.3 million. Receivables increased "modestly" to US$24.9 million, with most due receivables having been collected, the company said.

It also said that it is "closely monitoring" the ongoing outbreak of Covid-19 in India and the challenging conditions arising from it.

Currently, the midstream manufacturing segment of the diamond industry value chain centred in Surat, India, is continuing to operate, as a result of strong global demand for polished diamonds.

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However, polishing has declined somewhat due to the absence of ill or quarantined workers, more so for the producers of smaller stones, whose facilities are less conducive to the required social distancing.

"The situation is very dynamic, and the Indian epidemic is definitely creating uncertainties which may affect the value chain over the next two to three months," said Sarine Tech.