Sarine Technologies Ltd report & update the investing public on key developments in the three months ended 31 March 2024. In a review of Q1 2024, Sarine said, economic woes in China continued in Q1 2024 to stifle consumer demand in the second most important market for diamond jewellery, as consumers preferred to buy gold, the classic safehaven.
The rapid expansion of the LGD segment in the U.S. market has slowed significantly, also impacted by dramatic price drops – a one carat LGD can now be had retail for US$ 500! Consumer demand split between LGD and natural diamonds, with the latter’s historic market share reduced, is the new reality.
DeBeers sales, though significantly recovered from late 2023, with each of the initial sales cycles of 2024 progressively improving, are still some 16% down y-o-y in the initial four months of 2024, with expectations for full year sales cut by 10%. Vagueness as to the G7 sanctions regime and how it is to be expanded commencing September 2024, has also added uncertainty to the diamond industry, pertaining to natural stones (ND) and LGD alike.
Key takeaways are,
1: New Services Launched and Gaining Traction,
2: Lower inventory of natural polished diamonds at FY2023 year’s end and significant reductions in natural rough prices in Q1 2024 contributed to a recovery in their flow, benefiting Sarine’s core businesses.
3: Coupled with implemented reductions to operating expenses, Sarine returned to profitability in Q1 2024.
4: Sarine’s new services launched in Q1 2024 are gaining traction and starting to generate additional recurring revenues streams:
(i) Most Valuable Plan (MVP) paradigm for the optimal planning of small rough diamonds;
(ii) Adaptation of rough planning technologies to LGD;
(iii) GCAL by Sarine LGD grading lab in India.
5: AutoScan Plus and Journey combined solution best positioned to address ESG issues for luxury brands; along with collaboration with DeBeers’ subsidiary Tracr, also provide verifiable data for G7 sanctions on Russian sourced diamonds.
