Dull diamonds: Sarine Tech net profit down 6% in 2Q

Find out which unsharpened its earnings.

Sarine Tech has seen higher sales in the last year, but expenses also increased, cancelling out profits.

In a release, Sarine reported that higher R&D and sales & marketing expenses (previously
guided by management) were a drag on earnings.

Sarine adds that net profit was also dented by a higher effective tax rate (previously guided) as the Israeli corporate tax rate was raised to 26.5% for 2014 from 25% in 2013. Gross profit margin was
relatively stable at 71.6% for 2Q14.

Sarine’s key product, the Galaxy family systems saw a record 19 deliveries in 2Q14, bringing the installed base to 175 systems versus 160 in 1QFY14. Also, recurring revenue contributed 35% of group sales versus 30% in 1QFY14.

Sarine sees a benign diamond market and continues to have high hopes for FY15 as it drives up marketing efforts for new revenue streams via Sarine Light and Sarine Loupe.