Sarin posts 6.9% dip in revenues for Q3

Sarin Technologies Ltd’s. overall performance of Q3, 2008, shows revenues at US$8.8 million, falling 6.9 percent over Q3 in 2007. With respect to trade with its primary market, India, the company did see an increase in revenues by 8 percent valuing at US$6.6 million for the third quarter ending September 30, 2008. However, the global financial crisis and the credit freeze resulted in an overall slowdown in demand from diamond manufacturers during the quarter.

The gross profit figures were lowered by 5.5 percent to US$5.8 million, while a change in product mix allowed gross profit margin to improve marginally from 64.7 percent in Q3 2007 to 65.7 percent in Q3 2008.

Although the company has faced higher operating expenses compared to Q3 2007 (but lower than in Q2 2008), which pulled profit from operations down to US$1.3 million. Profit attributable to shareholders for the quarter dropped 49 percent to US$1.04 million.

"To mitigate the effects of these global negatives, we have commenced on actions to reduce operating expenditures by approximately 20%," said Zeev Leshem, CEO of Sarin Technologies.

Leshem added; "We have seen a recent reduction in the prices of rough and polished diamonds. Although this may create some negative short term issues, such a development could have a positive longer term impact on our business, by creating more demand for polished diamonds and the need for additional production capacity."

In the longer term of first nine months of 2008, company revenues showed an increase of 9.5 percent valuing at US$30.6 million, up from US$28.0 million in the comparable period of 2007. Profit from operations in this term was US$6.7 million compared to US$8.1 million in the same period of 2007, declining by 17.1 percent attributable to the higher operating expenses. Net profit also slipped by 5.1 percent to US$6.2 million from US$6.5 million in the said period in 2007.

The company is working at increasing its offerings, by initiating beta testing for a potential new product that utilises Galatea's ground-breaking technology for the automated evaluation of internal features in diamonds, in late 2008. Upon its successful commercialisation, recurrent revenue contribution from this new product can be expected in FY2009. "Besides enhancing our product offerings, we have also taken steps to boost sales in emerging markets such as southern Africa. Despite the short term disruption to sales due to the global financial crisis, we remain confident that this emerging market will present significant opportunities for us to expand our sales in the longer term", added Leshem. Sarin is listed on the Singapore Exchange Mainboard.