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
|
http://www.mtiwirelessedge.com
|
|
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|
|
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,
|
|
|
|
|
|
|
|
|
|
|
|
U.S. $ in thousands
(Except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
33,743
|
|
33,724
|
|
45,634
|
|
Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit from
operations
|
3,476
|
|
3,552
|
|
4,650
|
|
Finance expenses
|
210
|
|
245
|
|
342
|
|
Finance income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before
income tax
|
3,571
|
|
3,423
|
|
4,835
|
|
Income tax expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
|
|
|
|
|
|
|
Other comprehensive income (loss) net of tax:
|
|
|
|
|
|
|
Items that will
not be reclassified to profit or loss:
|
|
|
|
|
|
|
Re-measurement of defined benefit plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified to profit or loss:
|
|
|
|
|
|
|
Adjustment arising from translation of financial
statements of foreign operations
|
|
|
|
|
|
|
|
|
|
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|
|
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Total other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total comprehensive
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss)
attributable to:
|
|
|
|
|
|
|
Owners of the parent
|
3,151
|
|
2,868
|
|
4,045
|
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total comprehensive
income (loss) attributable to:
|
|
|
|
|
|
|
Owners of the parent
|
3,125
|
|
2,580
|
|
3,891
|
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Earnings
per share (dollars)
|
|
|
|
|
|
|
Basic and Diluted (dollars per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Weighted average
number of shares outstanding
|
|
|
|
|
|
|
Basic (dollars per share)
|
|
|
|
|
|
|
Diluted (dollars per share)
|
|
|
|
|
|
|
|
|
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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,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues arise from:
|
|
|
|
|
|
|
|
Sale of goods*
|
|
23,774
|
|
23,630
|
|
32,525
|
|
Rendering of services**
|
|
6,027
|
|
5,189
|
|
7,178
|
|
Projects**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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(*) 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):
|
|
|
|
Distribution &
Consultation Services
|
|
|
|
|
U.S. $ in thousands
|
|
Revenues
|
|
|
|
|
|
|
External
|
10,225
|
12,345
|
11,173
|
-
|
33,743
|
|
Internal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
10,225
|
12,345
|
11,400
|
(227)
|
33,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance (income),
net
|
|
|
|
|
(94)
|
|
Tax expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 4 - operating SEGMENTS (CONT.):
September 30,
2024 (Unaudited):
|
|
|
|
Distribution &
Consultation Services
|
|
|
|
|
U.S. $ in thousands
|
|
|
|
|
|
|
|
|
Segment
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated
liabilities
|
|
|
|
|
|
Nine month period ended September 30, 2023
(Unaudited):
|
|
|
|
Distribution &
Consultation Services
|
|
|
|
|
U.S. $ in thousands
|
|
Revenues
|
|
|
|
|
|
|
External
|
8,917
|
13,006
|
11,801
|
-
|
33,274
|
|
Internal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
8,917
|
13,006
|
12,002
|
(201)
|
33,724
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expense, net
|
|
|
|
|
129
|
|
Tax expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2023 (Unaudited):
|
|
|
|
Distribution &
Consultation Services
|
|
|
|
|
U.S. $ in thousands
|
|
|
|
|
|
|
|
|
Segment
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated
liabilities
|
|
|
|
|
|
Note 4 - operating SEGMENTS (CONT.):
Year ended December 31, 2023
|
|
|
|
Distribution &
Consultation
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
External
|
12,237
|
17,164
|
16,233
|
-
|
45,634
|
|
Inter-segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income, net
|
|
|
|
|
(185)
|
|
Tax expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
|
|
|
|
|
|
December 31, 2023:
|
|
|
|
Distribution &
Consultation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated
assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated
liabilities
|
|
|
|
|
|
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.
