- Strong sequential quarterly growth driven by optimistic business sentiments underpinned by improved market conditions
- Galaxy™ related revenue grew to approximately 20% of Q1 2011 revenue; recurring component from Galaxy™ business model nearing 15% of Q1 2011 revenue
- Deliveries of Galaxy™ and Solaris™ expected to continue to accelerate as Group on track to more than double installed base in 2011
Singapore, 12 May 2011 – Singapore Exchange Mainboard listed Sarin Technologies Ltd (“Sarin” or “the Group”) (U77:SI), a worldwide leader in the development, manufacturing, marketing and sale of precision technology products for the planning, processing, evaluation and measurement of diamonds and gems, today announced a strong set of financial results for the first quarter ended 31 March 2011.
Q1 2011 Financial Results Review
Due to optimistic business sentiments and improved overall market conditions, Sarin’s revenue rose to US$12.3 million in Q1 2011, an increase of 32% over US$9.3 million in Q4 2010. In particular, Galaxy™ related income, including from sales, recurring revenue from service centres and customer usage fees, contributed approximately 20% of Q1 2011 revenue, driven by the continued good reception of Galaxy™ technology by customers. The recurring revenue component from Sarin’s Galaxy™ / Solaris™ technology business model continued to expand and neared 15% of total Group revenue during the quarter. On a sequential quarterly basis, net profit surged 155% from US$1.3 million in Q4 2010 to US$3.3 million in Q1 2011.
Compared to Q1 2010, the Group recorded weaker performance in Q1 2011 with revenue and net profit lower by 10% and 25%, respectively. In Q1 2010, group revenue benefitted from pent-up demand in the diamond industry following the global financial crisis of 2009 as well as Sarin’s last (this business model is no longer offered) one-off sale (with no further recurring income) of a second Galaxy™ 1000 machine to a leading Indian diamond manufacturer. During that period, the Group also continued to take prudent measures to restrain operating expenses amidst the then economic uncertainties. In Q1 2011, the Group’s operating expenses returned to an appropriate level to support the Group’s business development plans under normal economic conditions.
The prospects for 2011 remain good. In the United States, growth in the retail diamond jewellery market is expected to be better than 3 to 4%. In China and India, diamond sales are expected to expand at a rate in excess of 20%, after growing by 25% and 31%, respectively, in 2010. The Group is optimistic of its prospect under these favourable market conditions and will continue to leverage on the Galaxy™ technology to expand market share in all inter-related products and in all markets.
The Group delivered six Galaxy™ and Solaris™ systems to customers and third-party service centre operators (in Russia and Namibia) in Q1 2011. . The Group is on track to more than double the installed base of Galaxy™ / Solaris™ systems in 2011, from just over 20 as at the end of 2010, with deliveries likely to accelerate throughout the current financial year. The Group has scheduled the shipping of Galaxy™ systems to South Africa and Botswana as well as new service centres, possibly in China and the United States, later in the year.
Another growth driver in Sarin’s product pipeline is the Light Performance Technology (LPT) which the Group acquired in late 2010. The Group is currently focusing on its development work, in particular the repackaging of the product to optimise it for the retail market. Sarin’s Chief Executive Officer, Mr. Uzi Levami, commented, “The acquisition of LPT is a major development for Sarin and is expected to have a significant impact on our product mix in the longer term. We expect the LPT product line to add to the Group’s recurring revenues as various aspects of this technology will be offered as a service on a per-use basis.” The Group expects modest revenue contribution from the initial sales of this new product late in FY2011.
This press release should be read in conjunction with Sarin’s Q1 2011 results announcement released on 12 May 2011 to the Singapore Exchange.About Sarin Technologies:
Established in 1988, Sarin Technologies Ltd. is a worldwide leader in the development and manufacturing of advanced planning, evaluation and measurement systems for diamond and gemstone production. Sarin products include diamond cut and color grading tools, the Galaxy™ 1000 and Solaris™ 100 inclusion mapping systems, rough diamond optimisation systems, laser cutting and shaping systems and laser-marking and inscription machines. Sarin systems have become an essential gemology tool in every properly equipped gem lab, diamond appraisal business and manufacturing plant, and are today considered essential items by both diamond dealers and retailers.For more information about Sarin and its products and services, visit http://www.sarin.com.