Sarin Technologies net profit dazzles at 20% growth to $20.8m

FY12 revenues up more than 10%.

Singapore Exchange Mainboard listed Sarin Technologies Ltd (Sarin) announced its financial results for the fourth quarter and financial year ended 31 December 2012.

Following the diamond industry downturn in Q3 2012, reduction in rough diamond prices and stabilisation of polished diamond prices in Q4 2012 led to an improvement in the general sentiment. Buoyed by overall positive business conditions in 1H 2012 and renewed diamond manufacturing activity in India in Q4 2012, the Group saw higher demand across most geographical regions and registered 10% growth in revenue to a record US$63.8 million in FY2012.

During the year, the Group accelerated Galaxy TM related penetration and increased Galaxy TM related recurring revenue by approximately 50%. Consequently, the proportion of recurrent income grew to over 25% of total revenue for the year. The change in revenue mix also lifted gross profit margins from 66% in FY2011 to 68% FY2012. With higher revenue and gross profit margin, net profit rose 20% to US$20.8 million in FY2012 and marked a new
record in the Group’s history.

In Q4 2012, the Group delivered seven Galaxy TM family systems to customers and one Galaxy TM XL to the service centre in South Africa. This raised the total installed base of Galaxy TM family systems to just over 95 as of 31 December 2012. Notwithstanding the respectable rebound in revenue on a quarterly sequential basis, Q4 2012 revenue of US$14.2 million was a marginal improvement over the previous corresponding period last  year. Due to lower gross profit margin, additional business development expenses associated with new products, including Sarine Light TM and Sarine Loupe TM, as well as higher third party commission, net profit for the fourth quarter declined 20% to US$3.8 million compared to Q4 2011.

To reward shareholders for the strong performance, the Board has declared a final dividend of US cent 1.25 per share, subject to approval at the Annual General Meeting. Together with the mid-year interim dividend of US cent 1.25 per share and the special interim dividend of US cents 2.00 per share announced in December 2012, total dividend payout for FY2012 would amount to US cents 4.50 per share. This translates to an increase of 73% over the  total dividend payout of US cents 2.60 per share (adjusted for the 1-for-4 bonus issue effected in May 2012) for FY2011. Going forward, for 2013, the Board has decided to increase the dividend policy to US cents 1.50 every six months, an increase of 50%, adjusted for May 2012 bonus issue, subject to semi-annual Board approval, the Annual General Meeting’s approval of the final dividend and subject to business conditions, financial results, other pre-empting uses of funds, statutory and tax issues, etc.