Israel-based Sarine Technologies reported a net loss of US$ 2.8 million on revenues of US$ 42.9 million (-27%) for the fiscal year ending on December 31, 2023, attributing it to economic challenges in the U.S. and China markets and disruptions caused by increasing consumer demand for lab-grown diamonds (LGD). In contrast, in 2022, Sarine had achieved a net profit of US$ 8.8 million on revenues of US$ 58.8 million.
Sarine cited concerns over a potential recession in the primary U.S. market and negative news regarding China's real estate market and banking sector as factors dampening consumer sentiment. Additionally, the rapid expansion of the LGD segment in the U.S. market in 2022 and 2023 disrupted demand for natural diamonds.
Annual revenues from India dropped by 27% to $30.3 million, while those from Africa halved to $13.6 million.
Despite these challenges, Sarine expressed optimism that disruptions caused by LGDs may be diminishing due to a significant drop in LGD retail prices and potential growing consumer awareness that LGDs are not always substantially more environmentally friendly.
The company highlighted lower inventory of natural polished diamonds at the end of FY2023 and a substantial 15-20% reduction in natural rough diamond prices in January 2024 as factors that may contribute to stabilizing the diamond industry.
