- Sarine Technologies (SGX:U77)'s 1H23 revenue of US$23.7 down 23.9% y-o-y on waning consumer demand in diamond markets. Revenue was below our expectations, at 46% of our FY23F estimates.
- Dampened end-market demand for polished diamonds led to less robust manufacturing activities in the midstream, which weighed on Sarine’s capital equipment sales and – to a smaller degree – inclusion scanning services, especially for larger diamonds. Capital equipment sales for 1H23 stood at 20 galaxy family inclusion mapping systems (vs. 32 in 1H22), which brought the installed base to 823 systems.
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- Gross margins were impacted by product mix while net margin pressure flowed from lower gross margins and stable operating expenses on a lower revenue base. Sales and marketing expenses were up 5.3% y-o-y despite a 23.9% decline in revenue, as Sarine continues to drive marketing for the trade-related services segment for future growth.
- US$0.0025 dividend was declared for 1H23 compared to S$0.015 in 1H22. See Sarine Technologies's dividend dates.
Caution in midstream, soft end-market demand unfavourable for Sarine.
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