Sarine Technologies, an Israel-based supplier of diamond-grading technology, faced a challenging year as its sales took a hit due to an oversupply in the midstream and weakened demand in the Indian manufacturing sector. The company reported a 27% drop in revenue to $42.9 million for 2023, accompanied by a loss of $2.8 million compared to the previous year’s profit of $8.8 million.
The decline in sales was particularly notable in capital equipment purchases, which plummeted by 50%, with the majority of the decrease occurring in the latter half of the year. Recurring revenues also experienced a 3% decline, although a 4% increase in the second half partially offset this, attributed in part to Sarine’s acquisition of a 70% stake in Gem Certification & Assurance Lab (GCAL) in May.
Sarine highlighted the impact of macroeconomic challenges and competition from lab-grown diamonds, which contributed to firm rough prices and diminishing polished prices, thereby affecting margins for midstream customers. Moreover, Indian manufacturers initiated a two-month halt on rough diamond imports towards the end of 2023, exacerbating the industry’s woes.
Sales to India, the largest market for Sarine, fell by 27% to $22 million, reflecting the weakened manufacturing demand. Revenue from Africa also declined significantly by 54% to $6.3 million, while sales to Europe decreased by 22% to $2.7 million. However, there was a notable increase in sales to the US, reaching $5.1 million compared to $842,000 in the previous year.
