Interim Results

MTI Wireless Edge Limited
21 August 2024
 

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21 August 2024

MTI Wireless Edge Ltd

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

Interim results

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 2024.

 

 

'Solid H1 - well placed for continued growth'

 

Financial highlights

·    Revenues level at US$22.3m (H1 2023: US$22.3m)

·    18% increase in EBITDA* to US$3.3m (H1 2023: US$2.8m)

·    Profit before tax increased 10% to US$2.3m (H1 2023: US$2.1m)

·    Earnings per share increased 8% to 2.14 US cents (H1 2023: 1.99 US cents)

·    Strong financial position maintained with net cash standing at US$5.5m on 30 June 2024 (31 December 2023: $8.1m) after payment of dividend (US$2.7m) and purchase of shares (US$0.6m) via the buyback facility during H1 2024

·    Expansion of buyback programme effective from 22 August 2024 with increased funding from £0.7m to a maximum of £1.0m

*Earnings before interest, tax, depreciation and amortisation.

Operational highlights

·    The Antenna division delivered a 16% increase in sales, driven by strong demand from the defence sector and for the Group's 5G backhaul antenna solution. There is a significant order backlog for both military antennas and 5G, plus an increased number of opportunities in the pipeline which provides reasonable visibility of future revenues.

·    Domestic sales for Mottech were slower during this period as a result of the conflict, combined with some weakening in North America and Western Europe, leading to an 11% decrease in revenues. Nevertheless, profitability for the period was substantially higher, reflecting a higher margin business mix, some currency benefits and successful price increases. Q3 trading has started well and prospects in Europe for Q4 onwards, in particular, look positive.

·    MTI Summit increased sales by 1%, held back by lower than expected revenues from PSK. Profitability was below the same period in last year after absorbing losses from PSK. The core business continues to perform well, tendering a good range of new designs and is well placed to pick up more contract wins in the future. PSK has had a challenging period, and to address this PSK reduced staff numbers in August 2024 to help offset current losses, whilst continuing to pursue an attractive new business pipeline.

·    Outlook: Demand for products is high and enquiry levels for potential future projects is at an all time high, largely relating to the global defence sector.

 

Moni Borovitz, Chief Executive Officer of MTI Wireless Edge, said:

"Demand for good communication utilising radio frequency solutions across the water, defence and 5G industries remains high. Our range of products are well positioned in each of these industries and we are experiencing strong enquiry levels, most notably in the defence sector. Our trading performance in H1 shows a good increase in profitability and strong cash generation, combined with maintaining our firm financial base.  We are therefore well placed for the current year. Not surprisingly, the conflict in Israel is having some impact on local market revenues although we did experience better deal flow in July and hopefully we will see the end to this conflict soon." 

 

 

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/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

 

 

 

 

Chief Executive's statement

 

We have delivered a solid trading performance for the first six months of the year. A key change has been the increase in new business prospects. Enquiry levels have risen substantially over the past 10 months particularly from the defence sector. These enquiries have now turned into new and potential new projects and as a result our new business pipeline is substantially higher than in 2023. We are therefore in a good overall position and remain focused on developing the opportunities in all three of our diversified but complementary divisions.

 

Antenna division

 

This division is a one stop shop for the sale of 'off the shelf' flat and parabolic antennas, combined with the provision of custom-developed antenna solutions to a range of commercial and military customers, with a growing focus on providing 5G backhaul antenna solutions to support mobile phone operators as they roll-out their 5G networks.

 

H1 was a strong trading period and the trend has continued into Q3, driven by the combination of demand for both military antenna and the Group's 5G backhaul antenna solution. Not surprisingly, defence spending has risen across the world following the outbreak of multiple conflicts. Orders for military antennas, while critical to all defence operations, tend to lag behind orders for other types of military equipment. We have experienced a strong flow of orders and opportunities, which have resulted in a healthy order backlog and pipeline of opportunities for military antennas, which underpins our confidence in trading for the full year for this division.

 

In H1 there was a good uplift in orders for the 5G backhaul antenna solution. However, it remains hard to predict the timing of future revenue levels for this product. That being said, the substantial prospects for it remain unchanged, as all cellular operators continue to be committed to establishing 5G networks. The pace of installation is the main variable, but at some point in the nearer-term future there will be a step change in order levels consistent with the widespread roll-out of 5G by multiple operators.

 

The ABS® antenna solution, which ensures the antenna adapts to any small movements caused by different climate conditions, is a relatively new solution responsible for bringing MTI to the attention of multiple new Tier 1 and Tier 2 potential customers. All of whom are conducting tests to prove the solution's viability. It has been an important door opener to a valuable new customer base and increases the likelihood of MTI being able to sell its other 5G backhaul solutions to them as well.

 

Water Control & Management division

 

This division provides wireless control systems to manage irrigation and water distribution for agriculture, municipal authorities and commercial entities. It operates under the Mottech brand and utilises part of the hardware technology from Motorola, integrated with the Company's own proprietary management software. Our solutions reduce water and power usage, whilst providing higher revenue from accurate irrigation, leading to an increased number and improved quality of crops cultivated.

Revenues for this division reduced by 11%, primarily due to lower activity levels in Israel and some weakening in the North American and Western European markets. Conversely, profitability from this division rose substantially. This was due to a significantly better gross margin, driven by high margin products, lower marketing costs and a positive impact from currency exchange and the implementation of successful price increases.

 

The domestic Israeli market has been impacted by the current conflict, with local municipalities understandably prioritizing other areas over water management. The revenue shortfall mainly involved lower margin work and since the half-year we have seen the situation resolve itself, with normal demand levels resuming.

 

Similarly, while Europe and North America had a slow start, orders for the second half of the year have improved and new opportunities for both markets are positive. This, together with early indications from a new technical solution we are offering, provides us with confidence in this part of the business.

 

The long-term driver for this division is the continuing global problem of water scarcity. 2.2 billion people still live without access to safely managed drinking water and 3.5 billion lack access to safely managed sanitation*. Using water efficiently is at the heart of Mottech's solution and the problem of water scarcity is no longer restricted to underdeveloped countries located close to the equator, with the issue now being a real threat across parts of Europe where water levels are dangerously low. Technologies, such as those deployed by Mottech, are key to the long-term solution.

 

*UNESCO report published on behalf of UN Water March 2024

https://www.un.org/sustainabledevelopment/blog/2024/03/un-world-water-development-report/

 

Distribution & Professional Consulting Services division

 

Operating under the MTI Summit Electronics brand, this division exclusively represents approximately 40 international suppliers of radio frequency/microwave components and sells these products to Israeli customers. Expert knowledge of both the international suppliers and customers further enables MTI to act as a consultant to all parties and assist with devising complete radio frequency/microwave solutions.

MTI Summit performed well, delivering a 1% increase in revenues notwithstanding lower revenue levels at PSK, which also negatively contributed to a reduction in its profitability. PSK experienced a challenging trading period and was loss making in H1. In response, we have reduced its cost base even though PSK's pipeline of opportunities does contain some significant possibilities, which could accelerate its recovery. Requests to MTI Summit for design solutions have increased, which is creating a good pipeline of potential design wins, some of which are quite material and likely to drive its growth in 2025.

Share buyback programme

The board decided to increase the Company's share buyback programme effective from 22 August 2024 and hold the shares purchased for a longer period of time. The board agreed to increase the funds that can be used under the share buyback programme from £0.7m to £1.0m as it believes strongly in the prospects of the business.

Outlook

 

Demand for our products is high and enquiry levels for potential future projects is at an all time high, largely relating to the global defence sector. Trading in Q3 has been positive so far and we are hopeful of securing some material contracts in the second half of the year. Overall, the business is well placed with good visibility on potential future contracts which will support the prospects for the business into 2025 and beyond.

 

 

 

 

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 174 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 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

 

Six month period ended

 June 30,

 

Year ended December 31,

 

2024

 

2023

 

2023

 

U.S. $ in thousands

              (Except per share data)

 

Unaudited

 

 







Revenues

22,327


22,354


45,634

Cost of sales

15,405


15,156


30,963







Gross profit

6,922


7,198


14,671

Research and development expenses

440


546


1,047

Distribution expenses

1,746


1,930


3,709

General and administrative expenses

2,547


2,537


5,278

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

(56)


(9)


13







Profit from operations

2,245


2,194


4,650

Finance expenses

137


182

 

342

Finance income

(195)


(85)


(527)







Profit before income tax

2,303


2,097


4,835

Income tax expenses

444


392


759







Profit

1,859


1,705


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

(139)


(165)


(216)







Total other comprehensive loss

(139)


(165)


(154)






 

Total comprehensive income

1,720


1,540


3,922







Profit (loss) attributable to:




 


Owners of the parent

1,880


1,761

 

4,045

Non-controlling interests

(21)


(56)


31






 

 

1,859


1,705


4,076

Total comprehensive income (loss) attributable to:




 


Owners of the parent

1,741


1,596


3,891

Non-controlling interests

(21)


(56)


31

 

1,720


1,540


3,922







Earnings per share (dollars)




 


Basic and Diluted (dollars per share)

0.0214


0.0199


0.0458







 




 


Weighted average number of shares outstanding




 


Basic (dollars per share)

87,787,614


88,398,585

 

88,283,490

Diluted (dollars per share)

87,812,145


88,398,585

 

88,283,490








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

INTERIM CONSOLIDATED STATEMENTS OF

CHANGES IN EQUITY

 

For the six month period ended June 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 six month period

    ended June 30, 2024:








Comprehensive income





 


 

Profit (loss) for the period

-

-

-

1,880

1,880

(21)

1,859

Other comprehensive loss

 

 

 

 

 

 

 

Translation differences

-

-

(139)

-

(139)

-

(139)

 

 

 

 

 

 

 

 

Total comprehensive income (loss) for the period

-

-

(139)

1,880

1,741

(21)

1,720

Acquisition and disposal of treasury shares

-

(551)

-

-

(551)

-

(551)

Dividend

-

-

-

(2,745)

(2,745)

-

(2,745)

 

 

 

 

 

 

 

 

Balance at June 30, 2024

209

22,510

(605)

4,361

26,475

1,201

27,676

 

 

 

 

 

 

 

 










 

 

 

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, 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 six month period

    ended June 30, 2023:








Comprehensive income





 


 

Profit (loss) for the period

-

-

-

1,761

1,761

(56)

1,705

Other comprehensive loss

 

 

 

 

 

 

 

Translation differences

-

-

(165)

-

(165)

-

(165)

 

 

 

 

 

 

 

 

Total comprehensive income (loss) for the period

-

-

(165)

1,761

1,596

(56)

1,540

Acquisition and disposal of treasury shares

-

(47)

-

-

(47)

-

(47)

Dividend

-

-

-

(2,656)

(2,656)

-

(2,656)

 

 

 

 

 

 

 

 

Balance at June 30, 2023

209

23,031

(415)

2,880

25,705

1,170

26,875

 

 

 

 

 

 

 

 










 

 

 

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

 

 

30.06.2024

 

30.06.2023

 

31.12.2023

 

U.S. $ in thousands

 

Unaudited

 

 

ASSETS






CURRENT ASSETS:






Cash and cash equivalents

6,006


6,384


8,454 

Trade and other receivables

13,461


9,603


14,284

Unbilled revenue

4,529


4,518


4,190

Current tax receivables

109


466


381

Inventories

8,186

 

7,439


7,484







 

32,291

 

28,410

 

34,793







 






NON-CURRENT ASSETS:






Long term prepaid expenses

29


42


37

Property, plant and equipment

5,357


5,133


5,398

Deferred tax assets

864


1,172


968

Intangible assets

3,427

 

3,779


3,507







 

9,677

 

10,126

 

9,910

 

 

 

 

 



 

 

 


 







Total assets

41,968

 

38,536


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

 

30.06.2024

 

30.06.2023

 

31.12.2023

 

U.S. $ In thousands

 

Unaudited

 

 

LIABILITIES AND EQUITY






CURRENT LIABILITIES:






Current maturities and short term bank credit and loans

447


56


314

Trade payables

7,454


5,222


7,882

Other accounts payable

3,551


3,503


4,558

Current tax payables

417


499


283







 

11,869


9,280


13,037







NON- CURRENT LIABILITIES:






Contingent consideration

1,117


1,432


1,117

Lease liabilities

498


129


514

Loans from banks, net of current maturities

54


76


64

Employee benefits, net

754


744


719







 

2,423


2,381


2,414







Total liabilities

14,292


11,661


15,451







EQUITY






Equity attributable to owners of the parent

 

 

 

 

 

Share capital

209


209


209

Additional paid-in capital

22,510


23,031


23,061

Translation differences

(605)


(415)


(466)

Retained earnings

4,361


2,880


5,226







 

26,475


25,705


28,030







Non-controlling interest

1,201


1,170


1,222







Total equity

27,676


26,875


29,252







Total equity and liabilities

41,968


38,536


44,703














 

 

August 20, 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

 

 

Six month period ended

 June 30,

 

Year ended December 31,

 

 

2024

 

2023

 

2023

 

 

U.S. $ in thousands

 

 

Unaudited

 

 

Cash Flows from Operating Activities:







Profit for the period


1,859


1,705


4,076

Adjustments for:







Depreciation and amortization


1,099


651


1,511

 (Gain) from sale of property, plant and equipment


(56)


(2)


(13)

Finance (income), net


(312)


(50)


(5)

Changes in Contingent consideration


-


-


(315)

Tax expenses 


444


392


759

Changes in operating assets and  liabilities:







Decrease (increase) in inventories


(751)


225


158

Decrease (increase) in trade receivables


963


519


(2,477)

Decrease (increase) in other accounts receivables


(257)


748


(897)

Increase in unbilled revenues


(339)


(2,314)


(1,986)

Increase (decrease) in trade and other accounts payables


(1,256)


(389)


3,228

Increase (decrease) in employee benefits, net

 

35

 

(8)

 

29








Cash from operations

 

1,429


1,477


4,068

 

 













Interest received

 

69

 

20

 

69

Interest paid

 

(39)

 

(17)

 

(59)

Income tax paid (received)

 

65

 

(249)

 

(540)








Net cash provided by operating activities


1,524


1,231


3,538
















 

 

 

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,

 

 

 

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

 

(370)

 

(183)

 

(426)

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

(314)

 

(144)

 

(364)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flows From Financing Activities:







 

Dividend


(2,745)


(2,656)


(2,656)

 

Payments of lease liabilities


(485)


(224)


(485)

 

Treasury shares acquired


(551)


(200)


(516)

 

Treasury shares sold


-


153


499

 

Acquisition of non-controlling interest in subsidiary


-


-


(35)

 

Receipt of loans from banks


168


-


460

 

Repayment of long-term loans from banks

 

(9)

 

(3)

 

(247)

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

(3,622)

 

(2,930)

 

(2,980)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Decrease)/Increase in cash and

cash equivalents during the period 

 

(2,412)


(1,843)


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

 

(36)

 

(52)

 

(19)

 

 

 

 

 

 

 


 

Cash and cash equivalents

 at the end of the period

 

6,006

 

6,384

 

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 June 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:


 

Six month period  ended 

    June 30,

 

Year ended December 31,

 


 

2024

 

2023

 

2023


 

U.S. $ in thousands


 

Unaudited

 

 

Revenues arise from:


 

 

 

 

 

Sale of goods*


16,183

 

15,722

 

32,525

Rendering of services**


3,854

 

3,126

 

7,178

Projects**


2,290


3,686


5,931

 


22,327

 

22,354

 

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 six month period ended June 30, 2024 and 2023 respectively and for the year ended December 31, 2023.


Six month period ended June 30, 2024 (Unaudited):


Antennas

Water Solutions

Distribution & Consultation Services

Adjustment & Elimination

Total

 

U.S. $ in thousands

Revenues






External

6,734

7,713

7,880

-

22,327

Internal

-

-

261

(261)

-

 

 

 

 

 

 

Total

6,734

7,675

8,141

(261)

22,327

 

 

 

 

 

 

 

 

 

 

 

 

Segment profit

325

1,266

374

280

2,245

 

 

 

 

 

 

Finance (income), net





(58)

Tax expenses





444

 

 

 

 

 

 

Profit

 

 

 

 

1,859

 

 

 

 

 

 

 

Note 4 - operating SEGMENTS (CONT.):


June 30, 2024 (Unaudited):

 

Antennas

Water Solutions

Distribution & Consultation Services

Adjustment & Elimination

Total


U.S. $ in thousands

 

 

 

 

 

 

Segment assets

16,028

11,966

11,634

-

39,628

 

 

 

 

 

 

Unallocated assets

 

 

 

 

2,340

 

 

 

 

 

 

Segment liabilities

4,676

4,086

4,855

-

13,617

 

 

 

 

 

 

Unallocated liabilities

 

 

 

 

675

 

 

Six month period ended June 30, 2023 (Unaudited):

 


Antennas

Water Solutions

Distribution & Consultation Services

Adjustment & Elimination

Total

 

U.S. $ in thousands

Revenues






External

5,821

8,656

7,877

-

22,354

Internal

-

-

134

(134)

-

 

 

 

 

 

 

Total

5,821

8,656

8,011

(134)

22,354

 

 

 

 

 

 

 

 

 

 

 

 

Segment profit

281

960

784

169

2,194

 

 

 

 

 

 

Finance expense, net





97

Tax expenses





392

 

 

 

 

 

 

Profit

 

 

 

 

1,705

 

 

 

 

 

 

 

June 30, 2023 (Unaudited):

 

Antennas

Water Solutions

Distribution & Consultation Services

Adjustment & Elimination

Total


U.S. $ in thousands

 

 

 

 

 

 

Segment assets

14,317

10,194

11,578

-

36,089

 

 

 

 

 

 

Unallocated assets

 

 

 

 

2,447

 

 

 

 

 

 

Segment liabilities

3,414

2,946

4,814

-

11,174

 

 

 

 

 

 

Unallocated liabilities

 

 

 

 

487

 

 

 

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.   The financial statements for the year ended 31 December 2023 were authorized for issue by the Board following their approval on 10 March 2024.

D.  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. As at 30 June 2024, 1,298,000 Ordinary Shares were held in treasury under the Programme. As of the date of this report, 1,648,000 Ordinary Shares were held in treasury under the Programme.

E.   On 20 March 2024 at the Company's extraordinary meeting, Mrs. Hani Lerman was elected as an external non-executive director.

F.   On 7 October 2023 Israel was attacked by the Hamas terror organization leading to war in the Gaza region and Israel. 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.

 

NOTE 6 - SUBSEQUENT EVENTS:

A.  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, with the intention to hold the Ordinary Shares purchased for a longer period of time.

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