25 November 2024
MTI Wireless Edge Ltd
("MTI", the "Company" or the "Group")
Q3 2024 Financial Results
and
Directorate Change
Well-positioned for the full-year and beyond, with a valuable and growing pipeline of opportunities across the business divisions particularly driven by defence and 5G
MTI Wireless Edge Ltd (AIM: MWE), the technology group focused on comprehensive communication and radio frequency solutions across multiple sectors, is pleased to announce its financial results for the nine-month period ended 30 September 2024 (the "Period").
Financial highlights
· Revenues for the Period were stable at $33.7m (nine months to 30 September 2023: $33.7m)
· 10% improvement in net profit to $3.1m (nine months to 30 September 2023: $2.8m), helped by increases in financial income and lower tax rates
· 11% increase in earnings per share to 3.60 US cents (nine months to 30 September 2023: 3.25 US cents)
· Strong balance sheet with net cash of $4.9m as at 30 September 2024 (30 September 2023: $6.4m) after using $1.1m to repurchase shares of the Company under its buyback programme
· Final dividend anticipated to be declared alongside MTI's full year results which will be announced during the first quarter of 2025
Operational highlights
· The Group continues to operate successfully and deliver a stable level of sales combined with growing profitability
· Antenna division performed well, driven by 5G and defence led sales
o Significant pick-up in sales of the Company's 5G backhaul solution in India during the second half of 2024, driven by new orders from a leading cellular service provider
o Increased demand for military antennas globally expected to continue to be strong into 2025
o Overall, the division is well placed for both the remainder of 2024 and beyond, with a healthy backlog of orders and a number of submitted tenders awaiting responses
· Mottech delivered a good third quarter
o Positive performance in North America, South Africa and Israel, which has remained stable despite the unrest in the Middle East
o Sales into Europe were behind last year, however, a valuable and growing pipeline of opportunities is in place
o Growing awareness amongst European countries of the need to manage and conserve water as an important resource
o China office closed as market demand remains unstable - all related costs were incurred in Q3 2024
o Sales in the quarter were 6% ahead of Q3 2023 but for the nine months they were slightly behind the prior year, but with good prospects for growth in 2025
· MTI Summit experienced a relatively slow third quarter
o Sales were held back due to shipping delays from vendors
o With shipments now expected to be back on track, sales in Q4 2024 are expected to benefit, together with a significant backlog in orders
o Strategic agreement for the distribution business is operating well and has been extended until mid-2026
o PSK's performance continued to be slow, but is expected to improve following the cost saving initiatives taken over the Summer combined with new business prospects
Directorate change
The Company today also announces that Dov Feiner, Executive Board Director and General Manager of the Antenna Division will become a Non-Executive Director of the Company and step down from his role as General Manager at the end of April 2025. Dov, who is aged 68 has worked in the Company for over 35 years, will be retiring from full-time employment. Eran Shmulinson, currently Vice President of Sales and Marketing for the Antenna Division will succeed Dov as General Manager of the Antenna Division, in a non-Board role.
Moni Borovitz, Chief Executive Officer of MTI Wireless Edge, said:
"We have completed a successful third quarter and we are well placed for the full-year and beyond. This was a good achievement, especially given the current regional conflicts and the associated uncertainty this creates. As shown in these results, the business has not been significantly affected, our partners and customers are focused on continuing as normal and I am proud to report that our internal teams have remained positive, determined and highly adaptable to managing any necessary changes. This has allowed us to move our ABS antenna solution, which has been granted a patent, into pre-production stage and introduce our own Elite Pro wireless irrigation controller to offer to Mottech's customers. Both products have superior technology and are key for our future growth.
"Defence is one of our three key sectors and global demand has been high, reflecting the concerns of many Governments regarding the more unstable world we now live in, a trend which is expected to continue. 5G is another key sector where we have received significant demand for our products from India and elsewhere, and there is substantial further potential from this market and others. Due to climate change, managing water as a key resource is becoming a higher priority for European countries who previously have taken water for granted. We believe this will open up new opportunities for Mottech.
"This, together with our strong net cash position, means the Company is well placed. Q4 has begun well and we anticipate continuing to grow the business and delivering an attractive return to our shareholders.
"Finally, on behalf of the Board I would like to express our heartfelt thanks to Dov Feiner who has successfully led the Antenna Division for many years, been a significant presence across the whole business and provided valuable counsel at Board level. We are grateful for the work he has done and are delighted that he has agreed to continue to work with us in a Non-Executive role when he steps down as the General manager of the Antenna Division in April next year."
For further information please contact:
| MTI Wireless Edge Ltd | +972 3 900 8900 |
| Moni Borovitz, CEO | |
| | |
| Allenby Capital Limited (Nomad and Joint Broker) | +44 20 3328 5656 |
| Nick Naylor/Alex Brearley/Piers Shimwell (Corporate Finance) | |
| Guy McDougall/Amrit Nahal (Sales and Corporate Broking) | |
| | |
| Shore Capital (Joint Broker) Toby Gibbs/ Rachel Goldstein (Corporate Advisory) Fiona Conroy (Corporate Broking)
| +44 20 7408 4090 |
| Novella (Financial PR) | |
| Tim Robertson/Safia Colebrook | +44 20 3151 7008 |
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 internationally recognised as a producer of commercial off-the-Shelf and custom-developed antenna solutions in a broad frequency range of HF to 170 GHz for commercial, RFID and military applications. MTI continuously invests in ground breaking technologies, explores new frequencies, and devises innovative solutions which empower our wireless communication customers with cutting-edge off-the-shelf and custom-made antennas.
We are at the forefront of technology and innovation, being the first to introduce Dual Band parabolic antennas, E Band Automatic Beam Steering antennas, E Band FCC compliant flat antennas, and more.
MTI supplies directional and omnidirectional antennas for outdoor and indoor deployments, including smart antennas for 5G backhaul, Broadband access, public safety, RFID, base station 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 and monitoring 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, increase crops quality and yield while reducing operational and maintenance costs providing fast ROI while helping sustain the environment. 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. It also specializes in the development, manufacture and integration of communication systems and advanced monitoring and control systems for the Government and defence industry market.
MTI WIRELESS EDGE LTD.
(An Israeli Corporation)
INTERIM CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
|
| Nine month period ended September 30, |
| Year ended December 31, | ||
|
| 2024 |
| 2023 |
| 2023 |
|
| U.S. $ in thousands (Except per share data) | ||||
|
| Unaudited |
|
| ||
| | | | | | |
| Revenues | 33,743 | | 33,724 | | 45,634 |
| Cost of sales | 23,122 | | 22,815 | | 30,963 |
| | | | | | |
| Gross profit | 10,621 | | 10,909 | | 14,671 |
| Research and development expenses | 731 | | 794 | | 1,047 |
| Distribution expenses | 2,518 | | 2,814 | | 3,709 |
| General and administrative expenses | 3,954 | | 3,757 | | 5,278 |
| Loss (profit) from sale of property, plant and equipment | (58) | | (8) | | 13 |
| | | | | | |
| Profit from operations | 3,476 | | 3,552 | | 4,650 |
| Finance expenses | 210 | | 245 |
| 342 |
| Finance income | (305) | | (116) | | (527) |
| | | | | | |
| Profit before income tax | 3,571 | | 3,423 | | 4,835 |
| Income tax expenses | 500 | | 569 | | 759 |
| | | | | | |
| Profit | 3,071 | | 2,854 | | 4,076 |
| Other comprehensive income (loss) net of tax: | | | | | |
| Items that will not be reclassified to profit or loss: | | | | | |
| Re-measurement of defined benefit plans | - | | - | | 62 |
| | | | | | |
| Items that may be reclassified to profit or loss: | | | | | |
| Adjustment arising from translation of financial statements of foreign operations | (26) | | (288) | | (216) |
| | | | | | |
| Total other comprehensive loss | (26) | | (288) | | (154) |
| | | | | |
|
| Total comprehensive income | 3,045 | | 2,566 | | 3,922 |
| | | | | | |
| Profit (loss) attributable to: | | | |
| |
| Owners of the parent | 3,151 | | 2,868 |
| 4,045 |
| Non-controlling interests | (80) | | (14) | | 31 |
| | | | | |
|
|
| 3,071 | | 2,854 | | 4,076 |
| Total comprehensive income (loss) attributable to: | | | |
| |
| Owners of the parent | 3,125 | | 2,580 | | 3,891 |
| Non-controlling interests | (80) | | (14) | | 31 |
|
| 3,045 | | 2,566 | | 3,922 |
| | | | | | |
| Earnings per share (dollars) | | | |
| |
| Basic and Diluted (dollars per share) | 0.0360 | | 0. 0325 | | 0.0458 |
| | | | | | |
|
| | | |
| |
| Weighted average number of shares outstanding | | | |
| |
| Basic (dollars per share) | 87,472,764 | | 88,332,198 |
| 88,283,490 |
| Diluted (dollars per share) | 87,511,080 | | 88,332,198 |
| 88,283,490 |
| | | | | | |
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENTS OF
CHANGES IN EQUITY
For the nine month period ended September 30, 2024 (Unaudited):
|
| Attributable to owners of the parent |
| ||||||
|
| Share capital | Additional paid-in capital | Translation differences | Retained earnings | Total attributable to owners of the parent | Non-controlling interest | Total equity | |
|
| U.S. $ in thousands |
| ||||||
|
|
|
|
|
|
|
|
| |
| Balance at January 1, 2024 | 209 | 23,061 | (466) | 5,226 | 28,030 | 1,222 | 29,252 | |
|
|
|
|
| | |
| | |
| Changes during the nine month period ended September 30, 2024: | | | | | | | | |
| Comprehensive income | | | | | | | | |
| Profit (loss) for the period | - | - | - | 3,151 | 3,151 | (80) | 3,071 | |
| Other comprehensive loss |
|
| |
|
|
| | |
| Translation differences | - | - | (26) | - | (26) | - | (26) | |
|
|
|
|
|
| |
| | |
| Total comprehensive income (loss) for the period | - | - | (26) | 3,151 | 3,125 | (80) | 3,045 | |
| Acquisition and disposal of treasury shares | * | (1,024) | - | - | (1,024) | - | (1,024) | |
| Share based payment | - | 79 | - | - | 79 | - | 79 | |
| Dividend | - | - | - | (2,745) | (2,745) | - | (2,745) | |
| | | | | | | | | |
| Balance at September 30, 2024 | 209 | 22,116 | (492) | 5,632 | 27,465 | 1,142 | 28,607 | |
| | | | | | | | | |
(*) Less than US$ 1 thousand
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENTS OF
CHANGES IN EQUITY (CONT.)
For the nine month period ended September 30, 2023 (Unaudited):
|
| Attributable to owners of the parent |
| ||||||
|
| Share capital | Additional paid-in capital | Translation differences | Retained earnings | Total attributable to owners of the parent | Non-controlling interest | Total equity | |
|
| U.S. $ in thousands |
| ||||||
|
|
|
|
|
|
|
|
| |
| Balance at January 1, 2023 | 209 | 23,078 | (250) | 3,775 | 26,812 | 1,226 | 28,038 | |
|
|
|
|
| | |
| | |
| Changes during the nine month period ended September 30, 2023: | | | | | | | | |
| Comprehensive income | | | | | | | | |
| Profit for the period | - | - | - | 2,868 | 2,868 | (14) | 2,854 | |
| Other comprehensive income |
|
| |
|
|
| | |
| Translation differences | - | - | (288) | - | (288) | - | (288) | |
|
|
|
|
|
| |
| | |
| Total comprehensive income for the period | - | - | (288) | 2,868 | 2,580 | (14) | 2,566 | |
| Acquisition and disposal of treasury shares | * | (27) | - | - | (27) | - | (27) | |
| Dividend | - | - | - | (2,656) | (2,656) | - | (2,656) | |
| Acquisition of a non-controlling interest in subsidiary | - | - | - | - | - | (45) | (45) | |
| | | | | | | | | |
| Balance at September 30, 2023 | 209 | 23,051 | (538) | 3,987 | 26,709 | 1,167 | 27,876 | |
| | | | | | | | | |
(*) Less than US$ 1 thousand
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, 2023 :
|
| Attributable to owners of the parent |
| |||||
|
| Share capital | Additional paid-in capital | Translation differences | Retained earnings | Total attributable to owners of the parent | Non-controlling interests | Total equity |
|
| U.S. $ in thousands | ||||||
|
|
|
|
|
|
|
|
|
| Balance as at January 1, 2023 | 209 | 23,078 | (250) | 3,775 | 26,812 | 1,226 | 28,038 |
|
|
|
|
|
|
|
|
|
| Changes during 2023: |
|
|
|
|
|
|
|
| Comprehensive income |
|
|
|
|
|
|
|
| Profit for the year | - | - | - | 4,045 | 4,045 | 31 | 4,076 |
| Other comprehensive income (loss) |
|
|
|
|
|
|
|
| Re measurements on defined benefit plans | - | - | - | 62 | 62 | - | 62 |
| Translation differences | - | - | (216) | - | (216) | - | (216) |
|
|
|
|
|
|
|
|
|
| Total comprehensive income (loss) for the year | - | - | (216) | 4,107 | 3,891 | 31 | 3,922 |
| Dividend | - | - | - | (2,656) | (2,656) | - | (2,656) |
| Acquisition of minority holdings in subsidiary | - | - | - | - | - | (35) | (35) |
| Acquisition and disposal, net of treasury shares | - | (17) | - | - | (17) | - | (17) |
|
|
|
|
|
|
|
|
|
| Balance as at December 31, 2023 | 209 | 23,061 | (466) | 5,226 | 28,030 | 1,222 | 29,252 |
|
| | |
|
| | |
|
The accompanying notes form an integral part of the financial statements.
MTI WIRELESS EDGE LTD.
(An Israeli Corporation)
INTERIM CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
|
| 30.09.2024 |
| 30.09.2023 |
| 31.12.2023 |
|
| U.S. $ in thousands | ||||
|
| Unaudited |
|
| ||
| ASSETS | | | | | |
| CURRENT ASSETS: | | | | | |
| Cash and cash equivalents | 5,144 | | 6,655 | | 8,454 |
| Trade and other receivables | 13,850 | | 11,697 | | 14,284 |
| Unbilled revenue | 4,874 | | 4,407 | | 4,190 |
| Current tax receivables | 291 | | 409 | | 381 |
| Inventories | 8,122 |
| 7,365 | | 7,484 |
| | | | | | |
|
| 32,281 |
| 30,533 |
| 34,793 |
| | | | | | |
|
| | | | | |
| NON-CURRENT ASSETS: | | | | | |
| Long term prepaid expenses | 31 | | 39 | | 37 |
| Property, plant and equipment | 5,339 | | 4,987 | | 5,398 |
| Deferred tax assets | 1,020 | | 1,072 | | 968 |
| Intangible assets | 3,388 |
| 3,739 | | 3,507 |
| | | | | | |
|
| 9,778 |
| 9,837 |
| 9,910 |
|
|
|
|
|
| |
| |
|
|
| |
|
| | | | | | |
| Total assets | 42,059 |
| 40,370 | | 44,703 |
| | | | | | |
The accompanying notes form an integral part of the financial statements.
MTI WIRELESS EDGE LTD.
(An Israeli Corporation)
INTERIM CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
|
| 30.09.2024 |
| 30.09.2023 |
| 31.12.2023 | |
|
| U.S. $ In thousands | |||||
|
| Unaudited |
|
| |||
| LIABILITIES AND EQUITY | | | | | | |
| CURRENT LIABILITIES: | | | | | | |
| Current maturities and short term bank credit and loans | 250 | | 198 | | 314 | |
| Trade payables | 6,163 | | 5,684 | | 7,882 | |
| Other accounts payable | 4,261 | | 3,817 | | 4,558 | |
| Current tax payables | 289 | | 422 | | 283 | |
| | | | | | | |
|
| 10,963 | | 10,121 | | 13,037 | |
| | | | | | | |
| NON- CURRENT LIABILITIES: | | | | | | |
| Contingent consideration | 1,117 | | 1,432 | | 1,117 | |
| Lease liabilities | 509 | | 150 | | 514 | |
| Loans from banks, net of current maturities | 75 | | 52 | | 64 | |
| Employee benefits, net | 788 | | 739 | | 719 | |
| | | | | | | |
|
| 2,489 | | 2,373 | | 2,414 | |
| | | | | | | |
| Total liabilities | 13,452 | | 12,494 | | 15,451 | |
| | | | | | | |
| EQUITY | | | | | | |
| Equity attributable to owners of the parent |
|
|
|
|
| |
| Share capital | 209 | | 209 | | 209 | |
| Additional paid-in capital | 22,116 | | 23,051 | | 23,061 | |
| Translation differences | (492) | | (538) | | (466) | |
| Retained earnings | 5,632 | | 3,987 | | 5,226 | |
| | | | | | | |
|
| 27,465 | | 26,709 | | 28,030 | |
| | | | | | | |
| Non-controlling interest | 1,142 | | 1,167 | | 1,222 | |
| | | | | | | |
| Total equity | 28,607 | | 27,876 | | 29,252 | |
| | | | | | | |
| Total equity and liabilities | 42,059 | | 40,370 | | 44,703 | |
| | | | | | | |
| November 24, 2024 |
|
|
|
| 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.
INTERIM CONSOLIDATED STATEMENTS OF
CASH FLOWS
|
| Nine month period ended September 30, |
| Year ended December 31, | ||||
|
|
| 2024 |
| 2023 |
| 2023 | |
|
|
| U.S. $ in thousands | |||||
|
|
| Unaudited |
|
| |||
| Cash Flows from Operating Activities: | | | | | | | |
| Profit for the period | | 3,071 | | 2,854 | | 4,076 | |
| Adjustments for: | | | | | | | |
| Depreciation and amortization | | 1,291 | | 956 | | 1,511 | |
| (Gain) from sale of property, plant and equipment | | (56) | | (6) | | (13) | |
| Finance (income), net | | (469) | | (86) | | (5) | |
| Changes in Contingent consideration | | - | | - | | (315) | |
| Tax expenses | | 500 | | 569 | | 759 | |
| Changes in operating assets and liabilities: | | | | | | | |
| Decrease (increase) in inventories | | (626) | | 258 | | 158 | |
| Decrease (increase) in trade receivables | | (7) | | (830) | | (2,477) | |
| Decrease (increase) in other accounts receivables | | 361 | | (191) | | (897) | |
| Increase in unbilled revenues | | (684) | | (2,129) | | (1,986) | |
| Increase (decrease) in trade and other accounts payables | | (1,870) | | 517 | | 3,228 | |
| Increase (decrease) in employee benefits, net |
| 69 |
| (13) |
| 29 | |
| | | | | | | | |
| Cash from operations |
| 1,580 | | 1,899 | | 4,068 | |
|
|
| | | | | | |
| | | | | | | | |
| Interest received |
| 69 |
| 46 |
| 69 | |
| Interest paid |
| (61) |
| (23) |
| (59) | |
| Income tax paid (received) |
| (453) |
| (344) |
| (540) | |
| | | | | | | | |
| Net cash provided by operating activities | | 1,135 | | 1,578 | | 3,538 | |
| | | | | | | | |
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENTS OF
CASH FLOWS (cont.)
|
|
| Nine month period ended September 30, |
| Year ended December 31, |
| ||||||
|
|
| 2024 |
| 2023 |
| 2023 |
| ||||
|
|
| U.S. $ in thousands |
| ||||||||
|
|
| Unaudited |
|
|
| ||||||
| Cash Flows From Investing Activities: | | | | | | |
| ||||
| Proceeds from sale of property, plant and equipment | | 56 | | 39 | | 62 |
| ||||
| Purchase of property, plant and equipment |
| (486) |
| (229) |
| (426) |
| ||||
|
|
|
|
|
|
|
|
| ||||
| Net cash used in investing activities |
| (430) |
| (190) |
| (364) |
| ||||
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
| ||||
| Cash Flows From Financing Activities: | | | | | | |
| ||||
| Dividend | | (2,745) | | (2,656) | | (2,656) |
| ||||
| Payments of lease liabilities | | (485) | | (328) | | (485) |
| ||||
| Treasury shares acquired | | (1,024) | | (362) | | (516) |
| ||||
| Treasury shares sold | | - | | 335 | | 499 |
| ||||
| Employee options issuance | | 79 | | - | | - |
| ||||
| Acquisition of non-controlling interest in subsidiary | | - | | (45) | | (35) |
| ||||
| Short-term loans and credit line received from banks | | 168 | | 136 | | 460 |
| ||||
| Repayment of long-term loans from banks |
| (9) |
| (10) |
| (247) |
| ||||
|
|
|
|
|
|
|
|
| ||||
| Net cash used in financing activities |
| (4,016) |
| (2,930) |
| (2,980) |
| ||||
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
| ||||
| (Decrease) Increase in cash and cash equivalents during the period |
| (3,311) | | (1,542) | | 194 |
| ||||
| Cash and cash equivalents at the beginning of the period |
| 8,454 |
| 8,279 |
| 8,279 |
| ||||
| Exchange differences on balances of cash and cash equivalents |
| 1 |
| (82) |
| (19) |
| ||||
|
|
|
|
|
|
| |
| ||||
| Cash and cash equivalents at the end of the period |
| 5,144 |
| 6,655 |
| 8,454 |
| ||||
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
| ||||
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 (radio frequency) and Microwave, including engineering services in the field of aerostat systems and system engineering services.
- Development, manufacture and integration of communication systems and advanced monitoring and control systems for the Government and defence industry market.
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, 2023 was approved by the board on March 10, 2024. The report of the auditors on those financial statements was unqualified.
The interim consolidated financial statements as of September 30, 2024 have not been audited.
The interim consolidated financial information should be read in conjunction with the annual financial statements as of December 31, 2023 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, 2023 are applied consistently in these interim consolidated financial statements.
On April 9, 2024, the IASB published IFRS 18 'Presentation and Disclosure in Financial Statements' which replaces IAS 1 Presentation of Financial Statements and is mandatorily effective for annual reporting periods beginning on or after January 1st, 2027. The main changes are as follows:
Note 2 - Significant Accounting Policies - (CONT.):
1. Mandatory sub totals to be presented in the profit and loss account.
2. Aggregation and disaggregation of information including the introduction of overall principles for how information should be aggregated and disaggregated in financial statements.
3. Disclosures related to management defined performance measures (MPMs).
The Company is currently assessing the impact of this new accounting standard and amendment.
Note 3 - REVENUES:
| |
| Nine month period ended September 30, |
| Year ended December 31, |
| |||
| |
| 2024 |
| 2023 |
| 2023 | ||
| |
| U.S. $ in thousands | ||||||
| |
| Unaudited |
|
| ||||
| Revenues arise from: | |
|
|
|
|
| ||
| Sale of goods* | | 23,774 |
| 23,630 |
| 32,525 | ||
| Rendering of services** | | 6,027 |
| 5,189 |
| 7,178 | ||
| Projects** | | 3,942 | | 4,905 | | 5,931 | ||
|
| | 33,743 |
| 33,724 |
| 45,634 | ||
|
|
|
|
|
|
|
| ||
(*) at the point in time
(**) over time
Note 4 - operating SEGMENTS:
The following tables present revenue and profit information regarding the Group's operating segments for the nine month period ended September 30, 2024 and 2023 respectively and for the year ended December 31, 2023.
Nine month period ended September 30, 2024 (Unaudited):
| | Antennas | Water Solutions | Distribution & Consultation Services | Adjustment & Elimination | Total |
|
| U.S. $ in thousands | ||||
| Revenues | | | | | |
| External | 10,225 | 12,345 | 11,173 | - | 33,743 |
| Internal | - | - | 227 | (227) | - |
|
|
|
|
|
|
|
| Total | 10,225 | 12,345 | 11,400 | (227) | 33,743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment profit | 1,010 | 1,804 | 285 | 377 | 3,476 |
|
|
|
|
|
|
|
| Finance (income), net | | | | | (94) |
| Tax expenses | | | | | 500 |
|
|
|
|
|
|
|
| Profit |
|
|
|
| 3,070 |
|
|
|
|
|
|
|
Note 4 - operating SEGMENTS (CONT.):
September 30, 2024 (Unaudited):
|
| Antennas | Water Solutions | Distribution & Consultation Services | Adjustment & Elimination | Total |
| | U.S. $ in thousands | ||||
|
|
|
|
|
|
|
| Segment assets | 15,719 | 12,695 | 11,325 |
| 39,739 |
|
|
|
|
|
|
|
| Unallocated assets |
|
|
|
| 2,320 |
|
|
|
|
|
|
|
| Segment liabilities | 4,562 | 4,184 | 4,248 |
| 12,994 |
|
|
|
|
|
|
|
| Unallocated liabilities |
|
|
|
| 778 |
Nine month period ended September 30, 2023 (Unaudited):
| | Antennas | Water Solutions | Distribution & Consultation Services | Adjustment & Elimination | Total |
|
| U.S. $ in thousands | ||||
| Revenues | | | | | |
| External | 8,917 | 13,006 | 11,801 | - | 33,274 |
| Internal | - | - | 201 | (201) | - |
|
|
|
|
|
|
|
| Total | 8,917 | 13,006 | 12,002 | (201) | 33,724 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment profit | 560 | 1,457 | 1,230 | 305 | 3,552 |
|
|
|
|
|
|
|
| Finance expense, net | | | | | 129 |
| Tax expenses | | | | | 569 |
|
|
|
|
|
|
|
| Profit |
|
|
|
| 2,854 |
|
|
|
|
|
|
|
September 30, 2023 (Unaudited):
|
| Antennas | Water Solutions | Distribution & Consultation Services | Adjustment & Elimination | Total |
| | U.S. $ in thousands | ||||
|
|
|
|
|
|
|
| Segment assets | 15,136 | 11,263 | 11,532 | - | 37,931 |
|
|
|
|
|
|
|
| Unallocated assets |
|
|
|
| 2,439 |
|
|
|
|
|
|
|
| Segment liabilities | 3,834 | 3,707 | 4,460 | - | 12,001 |
|
|
|
|
|
|
|
| Unallocated liabilities |
|
|
|
| 493 |
Note 4 - operating SEGMENTS (CONT.):
Year ended December 31, 2023
| | Antennas | Water Solutions | Distribution & Consultation | Eliminations | Total |
|
| U.S. $ in thousands | ||||
| Revenues |
|
|
|
|
|
| External | 12,237 | 17,164 | 16,233 | - | 45,634 |
| Inter-segment | - | - | 344 | (344) | - |
|
|
|
|
|
|
|
| Total | 12,237 | 17,164 | 16,577 | (344) | 45,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment profit | 841 | 1,986 | 1,552 | 271 | 4,650 |
|
|
|
|
|
|
|
| Finance income, net | | | | | (185) |
| Tax expenses | | | | | 759 |
| |
|
|
|
|
|
| Profit |
|
|
|
| 4,076 |
December 31, 2023:
|
| Antennas | Water Solutions | Distribution & Consultation | Eliminations | Total |
| | U.S. $ in thousands | ||||
|
|
|
|
|
|
|
| Segment assets | 17,124 | 12,468 | 12,711 | - | 42,303 |
|
|
|
|
|
|
|
| Unallocated assets |
|
|
|
| 2,400 |
|
|
|
|
|
|
|
| Segment liabilities | 4,952 | 4,326 | 5,293 | - | 14,571 |
|
|
|
|
|
|
|
| Unallocated liabilities |
|
|
|
| 880 |
Note 5 - SIGNIFICANT EVENTS:
A. On January 5, 2024, following approval at an extraordinary shareholders' meeting, the Company granted 600,000 share options to Mr. Moshe (Moni) Borovitz, the Chief Executive Officer, and 100,000 share options to Mr. Dov Feiner, the General Manager of the Company's Antenna Division. The expense for share-based payments (such as stock options) typically appears on the income statement as part of the Company's operating expenses.
B. The Board of directors declared a cash dividend of 3.1 US cents per share, being approximately $2,745,000. This dividend was paid on 11 April 2024 to shareholders on the register at the close of trading on 22 March 2024.
C. 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") and on 10 March 2024 the Board of directors of the Company and the board of directors of MTI Engineering decided to extend the Programme effective from
Note 5 - SIGNIFICANT EVENTS (CONT.):
12 March 2024 until 31 March 2025 and to increase the maximum value of the Programme to up to £700,000, with the intention to hold the Ordinary Shares purchased for a longer period of time. On 20 August 2024 the Board of directors of the Company and the board of directors of MTI Engineering decided to increase the maximum value of the Programme to up to £1,000,000, repeating the intention to hold the Ordinary Shares purchased for a longer period of time. As at 30 September 2024, 2,108,000 Ordinary Shares were held in treasury under the Programme. As of the date of this report, 2,243,000 Ordinary Shares were held in treasury under the Programme.
D. On 20 March 2024 at the Company's extraordinary meeting, Mrs. Hani Lerman was elected as an external non-executive director.
E. On 7 October 2023 Israel was attacked by the Hamas terror organization leading to war in the Gaza region and Israel followed by Hezbollah attacking Israel leading to war in the area. The war has led to a slowdown in the Israeli economy and if this war continues for a prolonged period, then it may begin to impact the Company. The wide usage of military reserve personnel, adverse foreign currency exchange rates and restrictions on access to certain areas in Israel are risks which may affect the Company if there is a prolonged period of war. As of the date of this report, and to the best of the Company's knowledge, the war has not had a significant effect on the Company. The Company continues to review the effects of the war on its trading as it believes that if the war continues for a long period of time, then the overall Israeli economy will be effected, and factors including the lack of available manpower, interest rates and foreign currency exchange rates may have an impact on its trading.
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