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| Sarin Returns to Profitability of US$ 0.4m in Q3 2009 Following 3 Quarters of Losses due to Recession Positive Generation of Cash Flow Accelerated in Q3 - Q3 2009 revenue rose to US$ 6.3m – increase of 71% and 490% over Q2 2009 and Q1 2009 respectively - Cash, cash equivalents and short-term investments rose to US$15.0 million in Q3 2009 from the US$ 9.4 million reported as of June 30, 2009 - Business improvement driven by ongoing recovery in diamond manufacturing activity, mainly in India. Trend of increasing industry activity is likely to continue for the rest of 2009 Singapore, 09 November 2009 – Singapore Exchange Mainboard-listed Sarin Technologies Ltd (“Sarin” or “the Group”) (U77.SI), a worldwide leader in the development, manufacturing and marketing of advanced diamond planning, evaluation, production, measuring and grading systems, is pleased to announce its financial results for the three and nine months ended 30 September 2009. Q3 and 9M 2009 Results With increasing levels of diamond manufacturing activity, primarily in India, Sarin continued to achieve higher revenue on a sequential quarterly basis. In Q3 2009, the Group recorded revenue of US$ 6.3 million, a surge of 71% from Q2 2009 and over 490% from the extremely depressed level in Q1 2009. Although the growth has been encouraging, revenue remained depressed on a year-on-year basis. For the 9 months ended 30 September 2009, group revenue fell 64% to $11.0 million due to the adverse impact of the global economic crisis. The Group continued to realize the full benefits of the cost control measures implemented from 4Q 2008. Significant cost savings achieved were reflected in substantially reduced total operating expenses during the quarter. With improving business sentiments in the diamond manufacturing industry and the Group’s efforts in managing costs effectively, the Group registered a profit of $0.4m in Q3 2009 after 3 consecutive quarters of losses. The return to profitability in Q3 2009 moderated the net loss for the 9 months ended 30 September 2009 to $3.0 million. In addition, the generation of positive cash flow accelerated in Q3 2009. As of 30 September 2009, cash, cash equivalents and short-term investments rose to US$15.0m from the US$ 9.4m reported as of 30 June 2009, and the US$ 8.3m reported as of 31 March 2009. Prospects When commenting on the diamond industry outlook, Mr. Uzi Levami, Sarin’s CEO, said, “The diamond business in the United States remains slow. Conversely, the market in Asia in general, and in China in particular, is expanding significantly and has become the driving force behind the current industry recovery. Indications are that the uptrend in diamond manufacturing activity, mainly in India, may continue into Q4 2009. However, it is still too early to predict whether this momentum will carry through into 2010. We believe further recovery is dependent on sales and confidence data from the upcoming holiday season at the end of the current year.” Going forward, the Group will continue to focus on revenue-generating projects, such as the rollout of its new Galaxy 1000TM product as well as introducing new products to meet under-addressed market needs. The commercial launch of Galaxy 1000TM through Sarin’s service centres in Israel and India continued in Q3 2009. In addition to educating customers on the capabilities of the new technology for inclusion mapping in rough and polished diamonds while offering commercial services for rough diamond mapping and planning, the Group also added a new service for sorting rough diamonds prior to planning activities. To ensure sufficient capacities in 2010 to meet expected demand, the Group is establishing new facilities for inclusion mapping services in these centres and completion is expected in early Q4 2009. In addition, a take-in window in Belgium will be opened in Q4 2009, to be followed by the inauguration of a full service centre in Q1 2010. The Group has also commenced the sales of the Galaxy 1000TM product to leading customers on a very limited and focused basis, with initial deliveries expected in Q4 2009. In Q3 2009, the Group launched the Instructor product to enthusiastic market response. This product provides ongoing quality control of polished diamonds during the manufacturing process and is capable of giving instructions on necessary corrective actions and/or possible asymmetric enhancements to non-optimal polished diamonds. It targets a need which until now has not been well addressed and the market potential is 90% untapped. Coming up next in the pipeline, is a new high-end product for cut grading of polished diamonds, called the Lab Edition HD (for high definition), which has demonstrated more accurate grading measurements than any other existing products. The Group has successfully completed the beta-testing and expects to be releasing this new product commercially in Q4 2009. Besides complementing the suite of existing products for integrated diamond manufacturing solutions, Sarin’s innovative new products will contribute to recurring income and expand the Group’s revenue base. This press release should be read in conjunction with Sarin’s Q3 2009 results announcement released on 09 November 2009 to the Singapore Exchange. |
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Sarin Technologies is a worldwide leader in the development of advanced diamond optimization systems, diamond color grading,
diamond cut grading and laser marking machines for diamond grading & gemstone production
