Ethernity Networks Ltd COVID-19 Business Update (1298J)
08 April 2020 - 4:00PM
UK Regulatory
TIDMENET
RNS Number : 1298J
Ethernity Networks Ltd
08 April 2020
8 April 2020
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
ETHERNITY NETWORKS LIMITED
("Ethernity" or the "Company")
COVID-19 Business Update
Ethernity Networks (AIM: ENET.L), a leading supplier of data
processing offload solutions on programmable hardware for
accelerating telco/cloud networks, provides the following business
update and measures taken in response to the COVID-19 pandemic. The
health and well-being of our staff and customers remain a priority
and we are taking all necessary precautions to safeguard them.
To date, the COVID-19 situation has not had a material impact on
the Company's business engagements, which continue to progress. We
have recently seen some recovery in Chinese markets in which the
Company is currently significantly engaged, specifically in the 5G
marketplace, as evidenced by the recent ACE-NIC delivery to a major
Chinese operator. Despite the uncertainty due to the COVID-19
pandemic, worldwide telecom capex remains forecast to grow at a one
percent CAGR until 2022*. It is, however, expected that certain
anticipated near-term agreements may be the subject of temporary
delays due to disruptions, as companies outside of our Chinese
markets impose their own safeguarding work policies.
The Company's offices continue to be manned at a 30% level, in
line with permissible limits set by the Israeli authorities,
allowing R&D staff to continue working in smaller teams to
allow social distancing to be observed. Due to the online nature
and connectivity capabilities of the business, staff working from
home are operating at capacity on a remote basis. As a result, the
Company sees no current impact on its ability to meet its delivery
milestones and execution of plans other than those that may arise
from engaged customers being affected by their own remote working
arrangements.
The Company is now focused on supporting the growing engagement
around our ACE-NIC family that embeds a Router-on-NIC
implementation which is ideal for initial 5G deployment, including
further advanced development on the ACE-NIC100 to support 200Gbps
UPF offload. This has deferred other developments, including PON,
development of which is planned to be re-engaged during the second
half of 2020.
In light of the continued uncertainty on the potential impact
and duration of the COVID-19 pandemic, the Board has taken certain
steps to both safeguard the well-being of staff and to position the
Company for the future. Where possible, a work-from-home policy has
been implemented and all non-discretionary expenditure has been
curtailed. The Company is also taking prudent steps to mitigate any
impact through certain short-term cash conservation measures,
including a reduction by directors of up to 50% of their
remuneration, with 20% of the reduction deferred.
The implementation of these cash management measures is, taking
account of our current cash and available resources, expected to
allow the Company to meet its planned objectives in the absence of
a prolonged uncertain outlook due to the effects of COVID-19.
However, the Company recognises that revenues are likely to be
delayed due to COVID-19 uncertainty, including where engaged
customers' functions are affected through remote working
arrangements. The Board continues to closely monitor the situation
and will take further action, as appropriate, to manage its working
capital position and strengthen the balance sheet to support the
execution of the Company's plans.
* "Telecom Capex to Grow at a One Percent CAGR by 2020" (Dell'Oro report, 3 April 2020)
For further information, please contact:
Ethernity Networks Tel: +972 8 915 0392
David Levi, Chief Executive Officer
Mark Reichenberg, Chief Financial Officer
Arden Partners plc (NOMAD and Broker) Tel: +44 207 614 5900
Richard Johnson / Benjamin Cryer
The PR Office (Investor Relations) Tel: +44207 284 6969
Marc Cohen/Tom Gilby
ethernity@theproffice.com
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 rns@lseg.com or visit www.rns.com.
END
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