Sarine Technologies, headquartered in Israel, disclosed a net loss of US$2.8 million against revenues totaling US$42.9 million (-27%) for the fiscal year concluding on December 31, 2023. The company attributed this downturn to economic headwinds experienced in the U.S. and China markets, alongside disruptions stemming from heightened consumer demand for lab-grown diamonds (LGD). This contrasts starkly with Sarine’s performance in 2022, when it registered a net profit of US$8.8 million with revenues amounting to US$58.8 million.
Sarine underscored concerns regarding a potential recession looming in the primary U.S. market, coupled with adverse reports surrounding China’s real estate sector and banking industry, which collectively dampened consumer sentiment. Furthermore, the rapid expansion of the LGD segment in the U.S. market throughout 2022 and 2023 disrupted the traditional demand for natural diamonds.
Annual revenues from India experienced a notable 27% decline, settling at $30.3 million, while those from Africa plummeted by half, reaching $13.6 million.
Despite encountering these formidable challenges, Sarine remains cautiously optimistic, pointing towards signs that disruptions triggered by LGDs may be abating, primarily due to a significant decrease in retail prices for LGDs and a potential uptick in consumer awareness regarding the environmental impact of LGDs, which may not always be substantially more eco-friendly.
The company accentuated a reduction in natural polished diamond inventory at the close of FY2023 and highlighted a noteworthy 15-20% decrease in natural rough diamond prices observed in January 2024 as potential factors contributing to stabilizing the diamond industry moving forward.
