leadf
logo-loader
RNS
viewMTI Wireless Edge Limited

MTI Wireless Edge - Results for the six months ended 30 June 2020

RNS Number : 2490W
MTI Wireless Edge Limited
17 August 2020
 

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR)

17 August 2020

MTI Wireless Edge Ltd

("MTI", the "Company" or the "Group")

Financial Results for the six months ended 30 June 2020

MTI Wireless Edge Ltd (AIM: MWE), the technology group focused on comprehensive communication and radio frequency solutions across multiple sectors, is pleased to today announce its financial results for the six month period ended 30 June 2020.

 

Financial highlights

·    Despite the closure of some of its key markets MTI delivered a 3% increase in revenues to $19.6m (H1 2019: $19.1m)

·    MTI recorded a 28% increase in operating profit to $1.9m, driven by improved profit margins (H1 2019: $1.5m)

·    This led to a 21% rise in net profit to $1.54m (H1 2019: $1.27m)

·    Earnings per share increased by 12% to 1.65 US cents (H1 2019: 1.47 US cents)

·    The Company has very little debt and net cash increased by 50% to $7.6m as at 30 June 2020 (30 June 2019: $5.00m)

·    2019 dividend of $0.02 per share (2018 dividend: $0.015 per share) paid on 10 April 2020

 

Operational highlights

·    While COVID-19 did slow activity, all three of the Company's divisions still recorded growth on a year on year basis

·    Mottech enjoyed a strong performance over the period, with increased demand for its water management systems in China and the successful launch of its Tethys system targeting the vineyard market in France

·    Positive outlook for 5G backhaul antennas, as COVID-19 increased the demand for broadband, a key driver for growth in the antenna division

·    MTI Summit continues to perform strongly, underpinned by its partnership with leading brands and increased spending in the global defence market

·    Ongoing commitment to the Company's share repurchase programme

·    Order book strength underpins management's confidence in the outlook for the business and the Group is on track to meet market expectations for profitability for the 2020 financial year

 

Moni Borovitz, Chief Executive Officer of MTI Wireless Edge, said: "That MTI remains on track to meet market expectations for profitability for the 2020 financial year despite the closure of some of our key markets over part of the period and the general slowdown caused by COVID-19, I believe reflects extremely well on MTI. The COVID-19 pandemic did reduce revenue in certain areas and added to supply chain costs, in particular freight costs, however, this was offset by cost savings across the business and with its balanced diversification across three divisions and multiple countries.

As is often the case adversity can also lead to opportunity. Demand for mobile and data connectivity increased substantially as people switched to remote working and schooling and consequently global projections for the adoption for 5G now indicate that by 2025 it will account for an estimated 45% of total mobile data, a very positive trend for our antenna division. Our distribution business is performing extremely well as is our water management business which continues to expand into key markets.

As of the date of this announcement, we have resumed working in most of our facilities (whilst adhering to the new health requirements and regulations) although working from home is still the preferred suggestion in Israel. We are seeing the majority of our markets recover although there are still significant challenges. Most importantly, none of our employees were infected by COVID-19.

Overall, we believe the Company is well positioned with very low borrowings, $7.6m of net cash and attractive growth prospects in our three divisions all underpinned by the Company's expertise in radio frequency solutions. That said, this is an extraordinary and unpredictable period where Governments have been taking unilateral decisions regarding the movement of goods and people, so we remain cautious but optimistic for the outcome for the year.

With these factors in mind, below is a short review of each of our three divisions:

The antenna division operating under the MTI wireless brand, which sells antennas and custom developed antenna solutions, has exciting opportunities in the future sales of its 5G backhaul antenna solutions to support mobile phone operators roll-out their 5G networks. According to Ericsson's global mobility report published in June 2020, mobile traffic increased dramatically due to COVID-19 lockdowns, with 85% of consumers now using video conferencing and the demand for mobile data over the year to Q1 2020 increased by 56% on a year on year basis. These step changes have led to significant upward revisions on the speed for the global adoption of 5G and given that our antenna division currently supplies backhaul solutions to this market, this is undoubtedly a key growth driver for the division and the Group.

Currently one fifth of the world's population suffers from some level of water scarcity. This is set to get worse with 2.8 billion people across 48 countries expected to face water shortages by 2025. Water scarcity is a global issue, making water management solutions critical for many countries.  Our wireless water control and management division continued to see good demand in the first half of the year, especially in China, although South Africa and the US markets were slowed due to the COVID-19 pandemic. Operating in 20 countries as the exclusive distributor of Motorola's proven IRRInet water management system, Mottech is well placed to continue to expand using its software licensing and recurring revenue model.

The distribution and professional consulting services business operating under the MTI Summit brand had a very strong period. Building upon a good performance in 2019, there is a backlog of proposals and design solutions developed by this division which customers are choosing to adopt, resulting in a strong flow of product sales. Russia has been a key area of growth in 2020, via our St Petersburg office established in 2015 and importantly there continues to be a good flow of requests for further design solutions and proposals which bodes well for future income.

Overall, we are cautiously optimistic for MTI's prospects in 2020. Looking further ahead, we confidently believe the Company's clear focus on providing radio frequency solutions coupled to being diversified across several markets and geographies positions us well to continue to grow and expand through a mix of acquisition led and organic growth."

Moni Borovitz, Chief Executive Officer, will provide a live investor presentation relating to the financial results for the six month period ended 30 June 2020 via the Investor Meet Company ("IMC") platform today at 10.00am UK time.

Investors can sign up for free via: https://www.investormeetcompany.com/mti-wireless-edge-ltd/register-investor.

 

For further information please contact:

 

MTI Wireless Edge Ltd                                                                             +972 3 900 8900

Moni Borovitz, CEO                                                                                  http://www.mtiwirelessedge.com

 

Allenby Capital Limited (Nomad and Joint Broker)                           +44 20 3328 5656

Nick Naylor, Alex Brearley (Corporate Finance)

Guy McDougall (Equity Sales)

 

Peterhouse Capital Limited (Joint Broker)                                           +44 20 7469 0930

Lucy Williams

Eran Zucker

 

Novella (Financial PR)                                                                              +44 20 3151 7008

Tim Robertson

Fergus Young

 

About MTI Wireless Edge Ltd. ("MTI")

Headquartered in Israel, MTI is a technology group focused on comprehensive communication and radio frequency solutions across multiple sectors through three core divisions:

 

Antenna Division 

MTI is a world leader in the design, development and production of high quality, state-of-the-art, and cost-effective antenna solutions including Smart Antennas, MIMO Antennas and Dual Polarity Antennas for wireless applications. MTI supplies antennas for both military and commercial markets from 100 KHz to 90 GHz.

Internationally recognized as a producer of commercial off-the-Shelf and custom-developed antenna solutions in a broad frequency range, MTI addresses both commercial and military applications.

MTI supplies directional and omnidirectional antennas for outdoor and indoor deployments, including smart antennas for WiMAX, Broadband access, public safety, RFID, base stations and terminals for the utility market.

Military applications include a wide range of broadband, tactical and specialized communication antennas, antenna systems and DF arrays installed on numerous airborne, ground and naval, including submarine, platforms worldwide. 

 

Water Control & Management Division 

Via its subsidiary, Mottech Water Solutions Ltd ("Mottech"), MTI provides high-end remote control solutions for water and irrigation applications based on Motorola's IRRInet state-of-the-art control, monitoring and communication technologies.

As Motorola's global prime-distributor Mottech serves its customers worldwide through its international subsidiaries and a global network of local distributors and representatives. With over 25 years of experience in providing customers with irrigation remote control and management, Mottech's solutions ensure constant, reliable and accurate water usage, while reducing operational and maintenance costs. Mottech's activities are focused in the market segments of agriculture, water distribution, municipal and commercial landscape as well as wastewater and storm-water reuse.

 

Distribution & Professional Consulting Services Division 

Via its subsidiary, MTI Summit Electronics Ltd., MTI offers consulting, representation and marketing services to foreign companies in the field of RF and Microwave solutions and applications including engineering services (including design and integration) in the field of aerostat systems and the ongoing operation of Platform subsystems, SIGINT, RADAR, communication and observation systems which is performed by the Company.

 

 

 

 

 

MTI WIRELESS EDGE LTD.

 (An Israeli Corporation)

 

INTERIM CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME

 

Six month period ended

 June 30,

 

Year ended December 31,

 

2020

 

2019

 

2019

 

U.S. $ in thousands

 

Unaudited

 

 

 

 

 

 

 

 

Revenues

19,605

 

19,126

 

40,043

Cost of sales

13,426

 

12,983

 

27,247

 

 

 

 

 

 

Gross profit

6,179

 

6,143

 

12,796

Research and development expenses

403

 

574

 

1,185

Distribution expenses

1,771

 

2,121

 

4,229

General and administrative expenses

2,087

 

1,961

 

3,931

Loss (profit) from sale of property, plant and equipment

8

 

(8)

 

(8)

 

 

 

 

 

 

Profit from operations

1,910

 

1,495

 

3,459

Finance expenses

168

 

112

 

211

Finance income

(91)

 

(51)

 

(161)

 

 

 

 

 

 

Profit before income tax

1,833

 

1,434

 

3,409

Tax expenses

293

 

160

 

454

 

 

 

 

 

 

Profit

1,540

 

1,274

 

2,955

Other comprehensive income (loss) net of tax:

 

 

 

 

 

Items that will not be reclassified to profit or loss:

 

 

 

 

 

Re-measurement of defined benefit plans

-

 

-

 

(6)

 

 

 

 

 

 

Items that may be reclassified to profit or loss:

 

 

 

 

 

Adjustment arising from translation of financial statements of foreign operations

(124)

 

31

 

62

 

 

 

 

 

 

Total other comprehensive income (loss)

(124)

 

31

 

56

 

 

 

 

 

 

Total comprehensive income

1,416

 

1,305

 

3,011

 

 

 

 

 

 

Profit (loss) attributable to:

 

 

 

 

 

Owners of the parent

1,452

 

1,280

 

2,849

Non-controlling interests

88

 

(6)

 

106

 

 

 

 

 

 

 

1,540

 

1,274

 

2,955

Total comprehensive income (loss) attributable to:

 

 

 

 

 

Owners of the parent

1,328

 

1,311

 

2,905

Non-controlling interests

88

 

(6)

 

106

 

1,416

 

1,305

 

3,011

 

 

 

 

 

 

Earnings per share (dollars)

 

 

 

 

 

Basic

0.0165

 

0.0147

 

0.0327

Diluted

0.0165

 

0.0147

 

0.0327

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

 

 

 

Basic

87,881,376

 

86,940,807

 

87,229,851

Diluted

88,047,659

 

87,083,078

 

87,229,851

 

 

 

 

 

 

 

The accompanying notes form an integral part of the financial statements.

 

 

MTI WIRELESS EDGE LTD.

 (An Israeli Corporation)

 

INTERIM CONSOLIDATED STATEMENTS OF

CHANGES IN EQUITY

For the six month period ended June 30, 2020 (Unaudited):

 

Attributed to owners of the parent

 

 

 

Share capital

Additional paid-in capital

Capital reserve

for share-based

payment

transactions

Translation differences

Accumulated losses

Total attributable to owners of the  parent

Non-controlling interest

Total equity

 

U.S. $ in thousands

 

 

 

 

 

 

 

 

 

Balance at January 1, 2020

207

22,868

52

(62)

(658)

22,407

883

23,290

 

 

 

 

 

 

 

 

 

Changes during the six month period

    ended June 30, 2020:

 

 

 

 

 

 

 

 

Comprehensive income

 

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

1,452

1,452

88

1,540

Other comprehensive loss

 

 

 

 

 

 

 

 

Translation differences

-

-

-

(124)

-

(124)

-

(124)

 

 

 

 

 

 

 

 

 

Total comprehensive income (loss) for the period

-

-

-

(124)

1,452

1,328

88

1,416

Dividend

-

-

-

-

(1,758)

(1,758)

-

(1,758)

Exercise of options to share capital

1

24

(4)

-

-

21

-

21

Profit from acquisition and disposal of treasury shares (note 5B)

-

8

-

-

-

8

-

8

Acquisition of the non-controlling interest in subsidiary

(note 5D)

-

(15)

-

-

-

  (15)

(15)

  (30)

Share based payment

-

-

2

-

-

     2

-

    2

 

 

 

 

 

 

 

 

 

Balance at June 30, 2020

208

22,885

50

(186)

(964)

  21,993

956

22,949

 

 

 

 

 

 

 

 

 

The accompanying notes form an integral part of the financial statements.

 

 

INTERIM CONSOLIDATED STATEMENTS OF

CHANGES IN EQUITY (CONT.)

For the six month period ended June 30, 2019 (Unaudited):

 

Attributed to owners of the parent

 

 

 

Share capital

Additional paid-in capital

Capital reserve

for share-based

payment

transactions

Translation differences

Accumulated losses

Total attributable to owners of the  parent

Non-controlling interest

Total equity

 

U.S. $ in thousands

 

 

 

 

 

 

 

 

 

Balance at January 1, 2019

205

22,388

366

(124)

(2,195)

20,640

375

21,015

 

 

 

 

 

 

 

 

 

Changes during the six month period

    ended June 30, 2019:

 

 

 

 

 

 

 

 

Comprehensive income

 

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

1,280

1,280

(6)

1,274

Other comprehensive loss

 

 

 

 

 

 

 

 

Translation differences

-

-

-

31

-

31

-

31

 

 

 

 

 

 

 

 

 

Total comprehensive income (loss) for the period

-

-

-

31

1,280

1,311

(6)

1,305

Dividend

-

-

-

-

(1,306)

(1,306)

-

(1,306)

Exercise of options to share capital

1

65

(10)

-

-

56

-

56

Profit from acquisition and disposal of treasury shares

-

21

-

-

-

21

-

21

Share based payment

-

-

5

-

-

5

-

5

 

 

 

 

 

 

 

 

 

Balance at June 30, 2019

206

22,474

361

(93)

(2,221)

20,727

369

21,096

 

 

 

 

 

 

 

 

 

 

The accompanying notes form an integral part of the financial statements.

 

 

INTERIM CONSOLIDATED STATEMENTS OF

 CHANGES IN EQUITY (CONT.)

For the year ended December 31, 2019 :

 

Attributable to owners of the parent

 

 

Share capital

Additional paid-in capital

Capital Reserve from share-based payment transactions

Translation differences

Accumulated losses

Total attributable to owners of the  parent

Non-controlling interests

 

U.S. $ in thousands

 

 

 

 

 

 

 

 

 

Balance as at January 1, 2019

205

22,388

366

(124)

(2,195)

20,640

375

21,015

 

 

 

 

 

 

 

 

 

Changes during 2019:

 

 

 

 

 

 

 

 

Comprehensive income

 

 

 

 

 

 

 

 

Profit for the year

-

-

-

-

2,849

2,849

106

2,955

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

Re measurements on defined benefit plans

-

-

-

-

(6)

(6)

-

(6)

Translation differences

-

-

-

62

-

62

-

62

 

 

 

 

 

 

 

 

 

Total comprehensive income for the year

-

-

-

62

2,843

2,905

106

3,011

Dividend

-

-

-

-

(1,306)

(1,306)

-

(1,306)

Non-controlling Interest of newly purchased subsidiary

-

-

-

-

-

-

402

402

Classification of ESOP that expired

-

291

(291)

-

-

-

-

-

Exercise of options to share capital

2

146

(31)

-

-

117

-

117

Profit from acquisition and disposal of treasury shares

-

43

-

-

-

43

-

43

Share based payment

-

-

8

-

-

8

-

8

Balance as at December 31, 2019

207

22,868

52

(62)

(658)

22,407

883

23,290

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                     

 

The accompanying notes form an integral part of the financial statements.

 

 

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

 

INTERIM CONSOLIDATED STATEMENTS OF

FINANCIAL POSITION

 

30.06.2020

 

30.06.2019

 

31.12.2019

 

U.S. $ in thousands

 

Unaudited

 

 

ASSETS

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

Cash and cash equivalents

7,860

 

5,662

 

8,140 

Trade and other receivables

10,019

 

10,560

 

9,799

Unbilled revenue

3,158

 

2,126

 

2,866

Current tax receivables

559

 

628

 

672

Inventories

4,998

 

5,113

 

5,748

 

 

 

 

 

 

 

26,594

 

24,089

 

27,225

 

 

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

 

Long term prepaid expenses

44

 

41

 

31

Property, plant and equipment

4,976

 

5,275

 

5,212

Deferred tax assets

639

 

704

 

664

Intangible assets

1,090

 

869

 

1,116

 

 

 

 

 

 

 

6,749

 

6,889

 

7,023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

33,343

 

30,978

 

34,248

 

 

 

 

 

 

 

The accompanying notes form an integral part of the financial statements.

 

 

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

 

INTERIM CONSOLIDATED STATEMENTS OF

FINANCIAL POSITION

 

30.06.2020

 

30.06.2019

 

31.12.2019

 

U.S. $ In thousands

 

Unaudited

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Current maturities and short term bank credit

229

 

303

 

312

Trade payables

4,082

 

5,242

 

6,448

Other accounts payable

4,657

 

2,760

 

2,691

Current tax payables

245

 

68

 

230

 

 

 

 

 

 

 

9,213

 

8,373

 

9,681

 

 

 

 

 

 

NON- CURRENT LIABILITIES:

 

 

 

 

 

Contingent consideration

69

 

-

 

69

Lease liabilities

239

 

447

 

224

Loans from banks, net of current maturities

53

 

299

 

141

Employee benefits, net

820

 

763

 

843

 

 

 

 

 

 

 

1,181

 

1,509

 

1,277

 

 

 

 

 

 

Total liabilities

10,394

 

9,882

 

10,958

 

 

 

 

 

 

EQUITY

 

 

 

 

 

Equity attributable to owners of the parent

 

 

 

 

 

Share capital

208

 

206

 

207

Additional paid-in capital

22,885

 

22,474

 

22,868

Capital reserve from share-based payment transactions

50

 

361

 

52

Translation differences

(186)

 

(93)

 

(62)

Accumulated losses

(964)

 

(2,221)

 

(658)

 

 

 

 

 

 

 

21,993

 

20,727

 

22,407

 

 

 

 

 

 

Non-controlling interest

956

 

369

 

883

 

 

 

 

 

 

Total equity

22,949

 

21,096

 

23,290

 

 

 

 

 

 

Total equity and liabilities

33,343

 

30,978

 

34,248

 

 

 

 

 

 

             

 

 

August 16, 2020

 

 

 

Date of approval of financial statements

Moshe Borovitz

Chief Executive Officer

Elhanan Zeira

Controller

Zvi Borovitz

Non-executive Chairman of the Board

The accompanying notes form an integral part of the financial statements.

 

 

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

 

INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

 

 

Six month period  ended

 June 30,

 

Year ended December 31,

 

 

2020

 

2019

 

2019

 

 

U.S. $ in thousands

 

 

Unaudited

 

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

Profit for the period

 

1,540

 

1,274

 

2,955

Adjustments for:

 

 

 

 

 

 

Depreciation and amortization

 

519

 

481

 

973

Loss (gain) from sale of property, plant and equipment

 

8

 

(8)

 

(8)

Equity settled share-based payment expense

 

2

 

5

 

8

Finance (income) expenses, net

 

(27)

 

32

 

32

Tax expenses 

 

293

 

160

 

454

Changes in operating assets and  liabilities:

 

 

 

 

 

 

Decrease in inventories

 

643

 

920

 

523

Decrease (increase) in trade receivables

 

(455)

 

(1,087)

 

233

Decrease (increase) in other accounts receivables

 

207

 

126

 

(137)

Decrease (increase) in unbilled revenues

 

(292)

 

145

 

(595)

Increase (decrease) in trade and other accounts payables

 

(242)

 

1,146

 

1,821

Increase (decrease) in employee benefits, net

 

(23)

 

62

 

136

 

 

 

 

 

 

 

Cash from operations

 

2,173

 

3,256

 

6,395

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest received

 

27

 

-

 

44

Interest paid

 

(8)

 

(36)

 

(77)

Income tax paid

 

(143)

 

(594)

 

(764)

 

 

 

 

 

 

 

Net cash provided by operating activities

 

2,049

 

2,626

 

5,598

 

 

 

 

 

 

 

               

 

The accompanying notes form an integral part of the financial statements.

 

 

 INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS (cont.)

 

 

 

Six month period ended

 June 30,

 

Year ended December 31,

 

 

 

2020

 

2019

 

2019

 

 

 

U.S. $ in thousands

 

 

 

Unaudited

 

 

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

Proceeds from sale of property, plant and equipment

 

21

 

8

 

31

 

Acquisition of initially consolidated subsidiaries

 

-

 

-

 

(23)

 

Purchase of property, plant and equipment

 

(172)

 

(501)

 

(707)

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

(151)

 

(493)

 

(699)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

Dividend

 

(1,758)

 

(1,306)

 

(1,306)

 

Payments of lease liabilities

 

(305)

 

(235)

 

(511)

 

Treasury shares acquired

 

(155)

 

(143)

 

(428)

 

Treasury shares sold

 

163

 

164

 

471

 

Exercise of share options

 

21

 

56

 

117

 

Acquisition of the non-controlling interest in subsidiary

 

(30)

 

-

 

-

 

Repayment of long-term loan from banks

 

(65)

 

(421)

 

(554)

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

(2,129)

 

(1,885)

 

(2,211)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease)  in cash and cash equivalents during the period 

 

(231)

 

248

 

2,688

 

Cash and cash equivalents  at the beginning of the period

 

8,140

 

5,401

 

5,401

 

Exchange differences on balances of cash and cash equivalents

 

(49)

 

13

 

51

 

 

 

 

 

 

 

 

 

Cash and cash equivalents  at the end of the period

 

7,860

 

5,662

 

8,140

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                       

 

The accompanying notes form an integral part of the financial statements.

 

 

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1 - General:

Corporate information:

M.T.I Wireless Edge Ltd. (hereafter - the "Company", or collectively with its subsidiaries, the "Group") is an Israeli corporation. The Company was incorporated under the Companies Act in Israel on December 30, 1998, and commenced operations on July 1, 2000. Since March 2006, the Company's shares have been traded on the AIM market of the London Stock Exchange.

The formal address of the Company is 11 Hamelacha Street, Afek industrial Park, Rosh-Ha'Ayin, Israel.

The Company and its subsidiaries are engaged in the following areas:

-     Development, design, manufacture and marketing of antennas for the military and civilian sectors.

-     A leading provider of remote control solutions for water and irrigation applications based on Motorola's IRRInet state of the art control, monitoring and communication technologies.

-     Providing consulting, representation and marketing services to foreign companies in the field of RF and Microwave, including engineering services in the field of aerostat systems and system engineering services.

 

Note 2 - Significant Accounting Policies:

The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in International Accounting Standard No. 34 ("Interim Financial Reporting").

The interim consolidated financial information set out above does not constitute full year-end accounts within the meaning of Israeli Companies Law. It has been prepared on the going concern basis in accordance with the recognition and measurement criteria of the International Financial Reporting Standards (IFRS). Statutory financial information for the financial year ended December 31, 2019 was approved by the board on March 1, 2019. The report of the auditors on those financial statements was unqualified.

The interim consolidated financial statements as of June 30, 2020 have not been audited.

The interim consolidated financial information should be read in conjunction with the annual financial statements as of December 31, 2019 and for the year then ended and with the notes thereto. The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2019 are applied consistently in these interim consolidated financial statements.

 

Note 3 - REVENUES:

 

 

Six month period  ended 

    June 30,

 

Year ended December 31,

 

 

 

2020

 

2019

 

2019

 

 

U.S. $ in thousands

 

 

Unaudited

 

 

Revenues arise from:

 

 

 

 

 

 

Sale of goods*

 

16,275

 

15,817

 

32,236

Rendering of services**

 

2,029

 

2,088

 

4,299

Projects**

 

1,301

 

1,221

 

3,508

 

 

19,605

 

19,126

 

40,043

 

 

 

 

 

 

 

                 

(*) at the point of time

(**) over time

 

 

Note 4 - operating SEGMENTS:

The following tables present revenue and profit information regarding the Group's operating segments for the six month period ended June 30, 2020 and 2019 respectively and for the year ended December 31, 2019.

 

Six month period ended June 30, 2020 (Unaudited)

 

Antennas

Water Solutions

Distribution & Consultation

Adjustment & Elimination

Total

 

U.S. $ in thousands

Revenues

 

 

 

 

 

External

5,916

7,942

5,747

-

19,605

Internal

-

-

81

(81)

-

 

 

 

 

 

 

Total

5,916

7,942

5,828

(81)

19,605

 

 

 

 

 

 

 

 

 

 

 

 

Segment profit

56

945

789

120

1,910

 

 

 

 

 

 

Finance expense, net

 

 

 

 

77

Tax expenses

 

 

 

 

293

 

 

 

 

 

 

Profit

 

 

 

 

1,540

 

 

 

 

 

 

 

As of June 30, 2020

 

Antennas

Water Solutions

Distribution & Consultation

Adjustment & Elimination

Total

 

U.S. $ in thousands

 

 

 

 

 

 

Segment assets

13,976

9,256

7,518

-

30,750

 

 

 

 

 

 

Unallocated assets

 

 

 

 

2,593

 

 

 

 

 

 

Segment liabilities

3,287

2,425

3,845

-

9,557

 

 

 

 

 

 

Unallocated liabilities

 

 

 

 

837

 

Note 4- operating SEGMENTS (CONT.):

Six month period ended June 30, 2019 (Unaudited)

 

Antennas

Water Solutions

Distribution & Consultation

Adjustment & Elimination

Total

 

U.S. $ in thousands

Revenues

 

 

 

 

 

External

5,872

7,659

5,595

-

19,126

Internal

-

-

87

(87)

-

 

 

 

 

 

 

Total

5,872

7,659

5,682

(87)

19,126

 

 

 

 

 

 

 

 

 

 

 

 

Segment profit

80

616

668

131

1,495

 

 

 

 

 

 

Finance expense, net

 

 

 

 

61

Tax expenses

 

 

 

 

160

 

 

 

 

 

 

Profit

 

 

 

 

1,274

 

 

 

 

 

 

 

As of June 30, 2019

 

Antennas

Water Solutions

Distribution & Consultation

Adjustment & Elimination

Total

 

U.S. $ in thousands

 

 

 

 

 

 

Segment assets

12,542

9,082

5,060

-

26,684

 

 

 

 

 

 

Unallocated assets

 

 

 

 

4,294

 

 

 

 

 

 

Segment liabilities

3,531

2,333

2,747

-

8,611

 

 

 

 

 

 

Unallocated liabilities

 

 

 

 

1,271

 

 

 

 

 

 

 

Year ended December 31, 2019

 

Antennas

Water Solutions

Distribution & Consultation

Adjustment & Elimination

Total

 

U.S. $ in thousands

Revenues

 

 

 

 

 

External

12,015

16,518

11,510

-

40,043

Inter-segment

-

-

171

(171)

-

 

 

 

 

 

 

Total

12,015

16,518

11,681

(171)

40,043

 

 

 

 

 

 

 

 

 

 

 

 

Segment profit

444

1,562

1,228

225

3,459

 

 

 

 

 

 

Finance expense, net

 

 

 

 

50

Tax expenses

 

 

 

 

454

 

 

 

 

 

 

Profit

 

 

 

 

2,955

 

 

 

 

 

 

 

 

Note 4- operating SEGMENTS (CONT.):

As of December 31, 2019

 

Antennas

Water Solutions

Distribution & Consultation

Adjustment & Elimination

Total

 

U.S. $ in thousands

 

 

 

 

 

 

Segment assets

14,576

9,793

5,729

-

30,098

 

 

 

 

 

 

Unallocated assets

 

 

 

 

4,150

 

 

 

 

 

 

Segment liabilities

3,514

1,836

3,837

-

9,187

 

 

 

 

 

 

Unallocated liabilities

 

 

 

 

1,771

 

 

 

 

 

 

 

 

Note 5 - SIGNIFICANT EVENTS:

A.  On 1 March 2020, the Board of directors declared a cash dividend of 2 US cents per share, representing approximately $1,758,000, in total. This dividend was paid on 10 April 2020 to shareholders on the register at the close of trading on 20 March 2020.

B.   On 24 January 2019, the Company announced a share repurchase program to conduct market purchases of ordinary shares of par value 0.01 Israeli Shekels each ("Ordinary Shares") in the Company up to a maximum value of £150,000 (the "Programme"). On 23 January 2020, the Company announced that the board of directors of the Company and the board of directors of MTI Engineering had decided to continue with the Programme for another six months until 26 July 2020 and on 27 July 2020 it was announced that the Programme would be extended until 26 January 2021. As at 30 June 2020, no Ordinary Shares were held in treasury under the Programme.

In 2020, MTI Engineering generated a profit of $8,000 in relation to the Programme, which was recorded in additional paid-in-capital.

C.   During January 2020, an employee of the Company exercised options over 60,000 Ordinary Shares in exchange for a total consideration of approximately $21,000.

D.  Mottech Water Solutions Ltd ("Mottech"), a subsidiary of the company, signed an agreement in May 2020 to acquire its joint venture partner's 40% holding in a joint venture it established in China in 2017 ("Mottech China"). Following this acquisition, Mottech China is now a fully owned subsidiary of the Company.

E.   Outbreak of COVID-19 and Business Continuity - In December 2019, the COVID-19 pandemic broke out in China, and the virus has spread to many countries around the world. In January 2020, the World Health Organization announced the outbreak of the Coronavirus as a global health emergency, and in March 2020, the World Health Organization declared the pandemic to be a global pandemic. The spread of the virus is an unusual event on its scale and is dynamic and emergent. Policymakers around the world were forced to take unprecedented steps to curb the pandemic, including the isolation of civilians and establishing strict regulations and rules to create social distancing, to reduce the chances of infection. This included restricting inbound and outbound flights. Along with the dangerous impacts on human lives as a result of the outbreak, significant global and local business impacts have been recorded.

Note 5 - SIGNIFICANT EVENTS (CONT.):

While the Group's offices were partially and/or temporarily closed (depending on country of operations) during the second part of March and most of April 2020, the Group was able to maintain good levels of operation using remote work procedures and a sufficient level of production in its production facilities while assuring the health of employees.

As of the date of this report the Group has resumed operations in most of its facilities (still under health requirements and regulations), although working from home is still the preferred suggestion in Israel. The Company sees recovery in most of the territories where it operates, although there are still significant challenges. All aspects of the Group's supply chain are working slower, and the Company's industry has been affected on the operational level, along with the rest of the world economy as it faces the risk of a global recession where the ability to predict the timing of a recovery is uncertain.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
IR KKQBNFBKDNFD

Quick facts: MTI Wireless Edge Limited

Price: 47.5

Market: AIM
Market Cap: £42.06 m
Follow

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

59 min read