Israeli diamond technology firm, Sarine Technologies, has released its performance update for the first half of 2023, outlining a notable 24% year-on-year decline in revenue. Despite this reduction, the company managed to maintain profitability, with a net profit of $1 million over the same period.
In an official press release, Sarine disclosed that its revenue and net profit experienced a respective decrease of 24% and 85%, culminating in figures of $23.7 million and $1 million for H1 2023. The company cited macroeconomic uncertainties stemming from an inflationary environment and the rapid escalation of interest rates as significant factors that have influenced consumer confidence and disposable income. Consequently, these developments have led to a decrease in the sale of polished diamonds, resulting in a reduction of rough diamonds in the supply chain and a subsequent slowdown in manufacturing activities within the midstream.
Anticipating the remainder of FY2023, Sarine acknowledged the likelihood of sustained elevated interest rates and inflation. Moreover, the potential for a recession in the U.S. remains plausible, thereby contributing to an environment where industry conditions are expected to continue being challenging. In this context, the company noted that its core businesses, which primarily involve the sale of capital equipment and, to a lesser extent, Galaxy scanning services, will likely continue to be impacted by subdued market conditions.
Sarine’s update underscores the complex interplay between economic variables and the diamond industry, reflecting the industry’s susceptibility to larger economic trends. Despite the prevailing challenges, the company’s ability to remain profitable amidst these circumstances highlights its resilience and adaptability within a rapidly changing landscape.
