Sarine Tech braces for loss in Q3, expects 50% earnings drop

There's no end in sight for diamond woes.

Sarine Technologies, a mainboard-listed diamond manufacturing equipment maker, warned shareholders that it expects to book a $1.5m loss in the third quarter.

The group also expects a 50% revenue drop on back of persistent issues of unsustainable rough vs. polished prices as well as residual inventory overhang.

“Sightholders, accordingly, refused an unprecedented 60%-70% of the offered rough diamonds at DeBeers' already substantially trimmed July sight, effectively buying only US$ 150-200 million worth – the lowest quantity for July since the global financial crisis of 2008-9,” Sarine said in a statement to the SGX.

“Thus, polishing output, which had already been reduced by some 20 – 30% as from December 2014, dropped to some 40 – 50% of normal output in July and August, all but negating the need for capital equipment investment and further impairing our ongoing processing fees from the GalaxyTM family of inclusion mapping systems,” the company added.