Sarine book net profit up nearly 600%

Sarine revenue 52% to US$62.1 million 

Update 1: Sarine Technologies Ltd announce its full year FY2021 results for the 12 months ended 31 December 2021. Its review of FY202 refers, the lockdowns following the onset of Covid-19 in H1 2020 disrupted diamond manufacturing activities in India and retailing activities throughout the world. With the gradual resumption of retailing activities in H2 2020, the diamond industry rebounded in late 2020 and this positive momentum carried over into 2021. 

The pent up demand, continuing restrictions on international travel and fiscal stimulus by many governments contributed to strong consumer demand for diamond jewellery in 2021. With overall positive business conditions for most of FY2021 and the strong resurgence of diamond manufacturing activities, Group revenue rose 52% to US$62.1 million, benefiting from increased capital equipment sales and higher recurring revenues, primarily from Galaxy inclusion scanning revenues, which rose 46% over FY2020 and lifted the gross profit margin to 74%.

Overall recurring revenues (including Galaxy inclusion scanning, digital tenders, Quazer services, polished diamond trade-related services, annual maintenance contracts, etc.) were approximately 55% of Group revenue in H2 2021 and 46% of Group revenue in FY2021. 

Overall rough and polished diamond wholesale and retail related (Trade) revenues, mostly from digital tenders, the Sarine Profile and the Sarine Diamond Journey were approximately 11% of group revenue for H2 2021 and 8% for FY2021.  

The Group delivered 32 Galaxy-family inclusion mapping systems in H2 2021 comprising three Galaxy Ultra models, two Galaxy models, 6 Meteor models and 21 Meteorite models. About 40% of the Meteor and Meteorite systems were sold under the one-off paradigm with no follow on per-use revenues. A total of 80 Galaxy systems were delivered in FY2021, and, as of 31 December 2021, our installed base was 711 systems.  

The improvement in business conditions and strong growth in Group revenue led to a corresponding increase in operating expenses as the Group returned to normal expenditures in FY2021, reversing the aggressive cost containment measures which were implemented from March 2020 at the onset of the Covid-19 pandemic. A portion of the increase in general and administrative expenses was primarily due to higher third-party professional fees related to the trial phase of the copyright and patent litigations in India.  

Although higher, overall operating expenses remained prudent, and this contributed to a 596% increase in net profit to US$16.5 million in FY2021. The Board of Directors has recommended a final dividend of US 1.0 cent per ordinary share for FY2021, and when approved at the AGM on 26 April 2022, the dividend is expected to be paid on 19 May 2022.