A combination of circumstances led to a weakness in the results of the diamond processing company Sarin Technologies In the third quarter of the year, and its stock lost 8.6% in trading on the Singapore Stock Exchange, and traded in declines on the Tel Aviv Stock Exchange as well.

Sarin joined trading in Tel Aviv in July, becoming the first dual company to trade simultaneously in Singapore and Israel. The company, managed by David Block, manufactures and markets diamond processing systems and its market value is about NIS 515 million – after a decrease of nearly 20% in the share since it was listed for trading in Tel Aviv.

The company reported that in the third quarter its revenues were $ 12.1 million, gross profit was 76% of turnover and net profit amounted to $ 1.9 million. By comparison, in the first two quarters of the year, revenues ranged from $ 17-19 million, and net profit to about $ 6-7 million.

“Seasonal slowdown due to proximity to holidays, and uncertainty”

The results of the first half of 2021 actually reflected a recovery in the company’s business after several years of declining revenues – so the half revenues amounted to $ 36 million, while in the entire previous year the revenues reached $ 41 million.

One of the reasons for the deteriorating results of the company in the third quarter, which is still developing and may further affect its business in the future, is, according to Sarin, “the circumstances in China, related to the common prosperity strategy adopted by the administration, “It’s important in the world when it comes to polished diamonds.” Chinese President Xi Jinping recently emphasized the distribution of capital and the creation of prosperity for all Chinese, against the background of an increase in capital accumulated by the rich In China.

It was further stated in Sharin’s announcement that “after a strong recovery in the first half of the year, the first months of the second half were affected by a normal seasonal slowdown and factors of uncertainty that developed”. The company notes that normally, the summer months are relatively weak due to vacations, during which there is a decline in diamond trading. This was joined this year by the proximity of the Jewish holidays, in which there is a decrease in the number of working days in the diamond trade in the United States, Belgium and, of course, in Israel – where Sharin’s production activity is also concentrated.

The daily use of stones increased to a peak of 110 thousand

Another factor, the main one among them, which adversely affected Sarin’s results in the quarter, is that it claims the rapid rise in rough diamond prices in the first half of the year, amid changes in the stock of polished stones.

At the same time, the company notes that the disruption in the supply chain of polished diamonds continues, and delays in supply from India have already reached six weeks. At the same time, supply was reduced compared to the beginning of the year due to delays related to the corona plague, just before the critical season – November to February, the season of purchases for Christmas and Chinese New Year.

However, Sarin notes that despite the reduction in the quantities of rough diamonds, the expanding adoption of its technology and the possibility of using it in smaller sizes, have led to the daily use increasing to a peak of 110,000 stones. The company expects a 60% increase in the number of stones that will pass through its systems this year compared to the period before the corona, to 30 million.

Sarin Technologies Founded in 1988, it says it is revolutionizing the world of diamond polishing, an industry that was previously based on the skills and experience of its employees, with a long training process and a source of mistakes and loss of valuable raw material. The company offers, however, computerized design with the option to polish several diamonds from one source.

The company’s share has risen on the Singapore Stock Exchange by about 78% in the past year, but weakened by about 23% from the peak it reached in August.

By Editor

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