Sarine's (SI:SARI) prudent cost management in Q218 translated into a 12.4% y-o-y increase in EBIT to US$4.7m, despite the lack of top-line growth. The company continues to focus on increasing the recurring revenue streams from retail-oriented services led by Sarine Profile and the 4Cs grading reports, with its second technology lab that recently opened in Mumbai. Despite the progress in already initiated projects with downstream customers being slower than expected, management remains confident that these services will become an important contributor to group sales.
Q218 earnings up on costs and tax rate reduction
Sarine reported a Q218 EPS of 1.18 US$ cents, up by 27.9% y-o-y on the back of lower operating expenses and more normalised tax rate (13.2% vs 23.6% in Q217). R&D costs were lower by 19.7% y-o-y at US$2.5m following last year’s peak in spending, while sales and marketing costs declined 4.9% y-o-y to US$3.6m, partially due to team restructuring. A temporary break in the IP litigation processes resulted in only a modest increase in G&A expenses at 2.3% y-o-y. Group revenues were down 1.1% y-o-y to US$18.0m.
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