Diamond tech player Sarine Technologies announced that profitability for the 3QFY2022 ended September period improved 12% y-o-y to US$2.2 million ($3.02 million), due primarily, to the increase in sales and financial income, offset by a reduced gross margin and an increase in operating expenses, as these returned to their pre-pandemic normal levels.
Revenue for the quarter was up 20% to US$14.5 million, with the launch of its improved Meteorite Plus in September. Gross margin in 3QFY2022 was down to 68%, mainly due to the rollout of the lower margin Meteorite Plus.
For 9MFY2022, revenues were slightly down by 5%, from an exceptionally strong 9MFY2021 (driven by a post Covid-19 surge), and with operations normalised to pre-Covid levels and expenditures expanded commensurately, profitability was down 40% y-o-y to US$8.7 million.
The board has assessed the cash (and short term investment) reserves currently held by the group against perceived risks and probable needs for cash, and has concluded that the funds on hand more than suffice.
Therefore, it has adopted a new dividend policy, whereby 80% of net profit generated will be distributed to the shareholders on a quarterly basis, subject to review of ongoing developments and shareholder approval, as required. Accordingly, the Board has declared a special interim dividend of 0.5 US cent.
On the outlook, geopolitical uncertainties are expected to continue through to the end of 2022 and quite probably into 2023. The latest data from the key US market indicate the economy and consumer demand remain robust and inflation has cooled somewhat, allowing retailers to remain cautiously optimistic on prospects for the year-end holiday season.
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Shares in Sarine last traded at 38 cents on Nov 11.
Photo: Bloomberg
