TIDMAFS
RNS Number : 3099A
Amiad Water Systems Ltd
29 March 2012
29 March 2012
Amiad Water Systems Ltd.
("Amiad" or the "Company")
Results for the twelve months to 31 December 2011
Amiad, a leading global producer of water treatment and
filtration solutions, announces its full year results for the
twelve months ended 31 December 2011.
Financial Summary
-- Revenue increased by 31% to $117.3m (2010: $89.4m)
-- Operating profit was $8.9m (2010: $4.3m)
-- Profit before tax was $8.3m (2010: $3.5m)
-- Gross margins at 44% (2010: 43%)
-- Fully diluted earnings per share was $0.312 (2010: $0.134)
-- Final dividend for 2011 of $0.055 per share (2010: $0.058),
making a total dividend for the year of $0.104 (total dividend for
2010: $0.078)
-- Cash and cash equivalents at 31 December 2011 were $11.8m (30
June 2011: $15.0m; 31 December 2010: $11.3m)
Operational Summary
-- Strategic:
o Adopted 'Amiad Water Systems Ltd' as the Company's name,
reflecting the development and expansion of Amiad's offering
o Operating under three brands: Amiad, Arkal (by Amiad) and
Filtomat (by Amiad)
o Now has nine global subsidiaries following the establishment
of Amiad Sistemas de Agua LTDA ("Amiad Brazil") and acquisition
ofthe remaining issued share capital of the Company's subsidiary in
France leading to formation of "Amiad Europe"
-- Operations:
o In the industrial and municipal segments, sales were
especially strong in Australia, China, East Europe, Southeast Asia
and Turkey
o Sales increased significantly in the irrigation segment,
especially in the United States
o Launched eight new products, representing a major expansion of
Amiad's offering and including two that are designed specifically
for its new target segments of oil & gas and ballast water
Commenting on the results, Arik Dayan, Chief Executive Officer
of Amiad, said: "We are pleased to announce such a strong increase
in sales and profits, reflecting the organic growth in Amiad's
traditional segments and the first full-year contribution from
Arkal. With our combined, enhanced portfolio of products, we aim to
be able to form the core of any water filtration or treatment
system worldwide.
"Looking ahead, we continue to expand our footprint globally and
have entered 2012 with a much higher backlog than this time last
year. With the global trend of investment in water infrastructure
projects persisting, we expect demand for Amiad's products to rise,
resulting in year-on-year growth."
Enquiries
Amiad Water Systems Ltd.
------------------------------- -----------------
Arik Dayan, Chief Executive
Officer
Amir Harel, Chief Financial
Officer +972 4 690 9500
------------------------------- -----------------
Nomura Code Securities Ltd.
------------------------------- -----------------
Clare Terlouw, Giles Balleny +44 20 7776 1200
------------------------------- -----------------
Luther Pendragon
------------------------------- -----------------
Harry Chathli, Claire Norbury +44 20 7618 9100
------------------------------- -----------------
Operational Review
Amiad achieved significant growth in all segments in 2011 as
Arkal Filtration Systems ("Arkal") made its maiden full-year
contribution following the Company's acquisition of the business in
April 2010. The products and projects that combined Amiad and Arkal
technology contributed significantly to the Company achieving
record revenues of $117.3m for the year, an increase of 31%
compared with full year revenues in 2010. The Company also changed
its name to 'Amiad Water Systems' to reflect the evolution and
expansion of the Amiad portfolio of products.
The Company performed well in all markets, with sales in the
irrigation segment increasing globally, including a return to
growth in the United States. The irrigation segment, which
constituted approximately 43% of total revenues, increased by 36%
compared with 2010. In the industrial and municipal segments, sales
grew by 33% over the previous year and were especially strong in
Australia, China, East Europe, Southeast Asia and Turkey. In 2011,
the industrial and municipal segments constituted approximately 53%
of total revenues.
Amiad continued to expand into new geographies and segments,
receiving increased interest in projects in the ballast water
industry and winning projects such as in the oil & gas industry
in Australasia. Revenues generated by the ballast water and oil
& gas segments combined increased by 80% compared with 2010 and
constituted approximately 4% of total revenues.
In addition, Amiad pursued its strategy to consolidate existing
subsidiaries as well as establishing a subsidiary in Brazil to
target this key market.
Global Activity
Asia
In China, in addition to its traditional business in the
country, one of the largest projects the Company undertook was in
the oil & gas segment using its microfibre thread filter. In
the second half of the year, Amiad was awarded two significant
irrigation contracts.
In India, production continued to expand at Amiad's subsidiary
following the completion of the product assembly line in late 2010,
which is now producing a small number of filters for the steel
industry. The Company also experienced a growth in irrigation
projects, which is expected to increase further in 2012.
As announced on 19 December 2011, Amiad entered into a $2.85m
agreement for the next stage of a water filtration project with one
of South Korea's largest steel factories, which is due to be
delivered in 2012. This follows the successful completion of the
initial two phases of the project, valued at approximately $3m,
that were carried out between 2007 and 2011. As part of the
project, Amiad will install its innovative, microfibre filtration
system in order to treat wastewater and protect the factory's
reverse osmosis membranes.
US and South America
In the United States, Amiad received increased interest for
projects in the ballast water industry.
The Company also experienced a return to growth in the
irrigation segment, driven primarily by an increase in farming and
food consumption. Amiad undertook significant projects in the
states of California and Florida. In 2012, the Company expects
higher activity in the irrigation segment in the United States.
During the year, the Company established Amiad Brazil to focus
on traditional industry, and the oil & gas and municipal
segments. As announced on 13 June 2011, Amiad secured a project to
provide its proprietary Arkal SpinKlin Disc Filters for the
Aquapolo tertiary wastewater treatment project in Sao Paulo,
Brazil. The facility, one of the largest of its kind in the
Southern Hemisphere, produces reclaimed water for industrial
purposes. The Company expects the business to grow in the mid- to
long-term.
EMEA
For Amiad, the EMEA territory encompasses countries such as
France and Spain in Europe; Russia and former CIS countries in East
Europe; Turkey, Israel and others in the Middle East; and Africa.
The Company saw a 28% year-on-year sales growth both in Western and
Eastern Europe.
In Western Europe, Amiad grew in Italy, Norway, Spain and
Sweden, primarily in the industrial, municipal and oil & gas
segments. In France, Amiad successfully delivered the second phase
of an existing project in the oil & gas segment for the
provision of a salt leaching brine filtration system at an
underground liquid hydrocarbon storage facility.
In Russia, the Company saw a doubling of sales due to projects
mainly in the municipal segment, including a project for iron
removal at a drinking water facility. Sales also grew in the
Ukraine and the former Yugoslavian countries.
Australia
Amiad experienced its best ever year in Australia in terms of
revenues and profits. It successfully commissioned a pre-filtration
system, based on Arkal disc technology, at a desalination plant in
Adelaide. The facility is designed to treat ocean water to reduce
the reliance of the southern Australian states on water from the
River Murray and other rain-dependent sources. The Amiad solution
was incorporated from the design through construction phases of the
pre-filtration system.
Post period-end, as announced on 20 February 2012, Amiad was
awarded two significant contracts in Australia, valued at
approximately US$8m and US$1.6m respectively, for reverse osmosis
and pre-filtation membrane protection for projects in the
desalination and oil & gas industries.
Strategic
The Company adopted 'Amiad Water Systems Ltd' as its new name to
reflect the development and expansion of Amiad's offering following
the merger with Arkal Filtration Systems. The enlarged business,
operating in a greater number of market segments and geographies,
aims to provide a wider range of products based on innovative
solutions that can form the core of any water treatment system
worldwide.
Based on distinct, but synergistic and complementary
technologies, Amiad now operates under three brands:
-- "Amiad" - automatic self-cleaning suction scanner screen
technology-based products, providing a variety of filtration
solutions for the industrial, municipal and irrigation
segments;
-- "Arkal (by Amiad)" - automatic self-cleaning disc filtration
technology and polymer casing products, providing solutions for
irrigation, municipal, ballast water and marine applications;
and
-- "Filtomat (by Amiad)" - automatic self-cleaning filtration
solutions for the industrial and municipal segments, based on a
unique patented microfibre technology that allows filtration to a
finer degree, and provides automatic self-cleaning suction scanner
screen technology to the irrigation segment.
In November 2011, Amiad launched eight new products under its
three brands. The new products, which represent a major expansion
of Amiad's offering, have applications across the Company's range
of sectors, and include two that are designed specifically for its
new target segments of oil & gas and ballast water. The new
products will start to be delivered in 2012 and are already
receiving significant interest.
During the year, Amiad continued to make progress on its stated
strategy of expanding its presence through gaining full control of
its subsidiaries in order to have a local presence and establish
direct sales channels in competitive markets.
As announced on 7 February 2011, Amiad acquired the remaining
issued share capital of its French subsidiary, and subsequently
consolidated all central and western European activity under the
newly established Amiad Water Systems Europe SAS ("Amiad Europe").
Similarly in China, Amiad completed the integration of the Arkal
subsidiaries with the Company's existing infrastructure.
The Company founded Amiad Sistemas de Agua LTDA in September
2011 as a wholly-owned subsidiary to enhance the sale and marketing
of Amiad's products and solutions in Brazil, where there is
increasing interest and investment in water infrastructure
projects.
Financial Review
Revenues for the twelve months ended 31 December 2011 increased
by 31% to $117.3m compared with $89.4m for the full year 2010.
Fully diluted earnings per share was $0.312 (2010: $0.134).
Operating profit was $8.9m compared with $4.3m in 2010 and
profit before tax was $8.3m (2010: $3.5m).
Gross margins were 44% compared with 43% in 2010. As reported
previously, during the first half of the year the Company faced
pressure from the increased price of raw materials. Amiad took
action to mitigate this increase, including raising the prices of
its products. In 2012, gross margins are expected to be similar to
full year 2011.
As of 31 December 2011, cash and cash equivalents in the bank
were $11.8m compared with $15.0m at 30 June 2011 and $11.3m at 31
December 2010. The reduction from 30 June 2011 mainly reflects an
increase in working capital to support the Company's growth. The
Company also made an investment in SAP, and there was a growth in
expenses relating to Research & Development and Sales &
Marketing, including the launch of eight new products.
Dividend
The Directors have decided to declare a final dividend out of
the Company's profits for the twelve months ended 31 December 2011
of $0.055 gross per share (final dividend 2010: $0.058 gross per
share), with an ex dividend date of 13 June 2012, a record date of
15 June 2012 and a payment date of 9 July 2012. This makes a total
dividend for the year of $0.104 per share (total dividend for 2010:
$0.078 gross per share).
Outlook
Amiad continues to expand its global footprint in the industrial
and municipal markets, and to experience a strong return to growth
in the irrigation segment. The new segments of ballast water and
oil & gas are progressing well, and it is expected that their
contribution to the Company's sales will increase.
The Company has entered 2012 with a substantially higher backlog
than at the corresponding period in 2011. With the global trend of
investment in water infrastructure projects persisting, the Board
expects demand for Amiad's products to increase, resulting in
continuing year-on-year growth.
AMIAD WATER SYSTEMS LTD.
(Formerly - Amiad Filtration Systems Ltd.)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
----------------
2011 2010
------- -------
$ in thousands
----------------
Assets
CURRENT ASSETS:
Cash and cash equivalents 11,848 11,293
Financial assets at fair value
through profit
or loss 442 2,513
Trade and other receivables:
Trade 40,913 36,428
Other 4,277 3,134
======== ========
Inventories 29643, 23,285
Current income tax assets 2007, 900
-------- --------
Total Current Assets 89,130 77,553
-------- --------
NON-CURRENT ASSETS:
Investment in associates 10 10
Loans to a related party 558 642
Severance pay fund, net 112 373
Long-term receivables 397 363
Prepaid expenses 228 135
Property, plant and equipment 9,014 6,850
Intangible assets 19,287 18,743
Deferred income tax assets 1,503 928
-------- --------
Total Non Current Assets 31,109 28,044
-------- --------
Total Assets 120,239 105,597
======== ========
AMIAD WATER SYSTEMS LTD.
(Formerly - Amiad Filtration Systems Ltd.)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
----------------
2011 2010
------- -------
$ in thousands
----------------
Liabilities and Equity
CURRENT LIABILITIES:
Short-term credit and current
maturities of
borrowings from bank 16,686 16,659
Financial liabilities at fair
value through
profit or loss- derivatives 816 47
Trade and other payable:
Trade 24,387 18,331
Other 8,797 8,993
Current income tax liability 404 1,498
--------- ---------
Total Current Liabilities 51,090 45,528
--------- ---------
NON CURRENT LIABILITIES:
Borrowings from banks and others
(net of current maturities) 16,829 11,861
Put option liability 2,553 2,220
--------- ---------
Deferred income tax liabilities 7
--------- ---------
Total Non Current Liabilities 19,389 14,081
--------- ---------
Total Liabilities 70,479 59,609
--------- ---------
EQUITY:
Capital and reserves attributable
to
equity holders of the Company:
Share capital 2,789 2,780
Capital reserves 24,692 24,467
Transaction with non-controlling
interests (180) -
Currency translation reserve (20) 708
Retained earnings 22,383 17,743
--------- ---------
49,664 45,698
Non-controlling interests 96 290
--------- ---------
Total Equity 49,760 45,988
--------- ---------
Total Liabilities and Equity 120,239 105,597
========= =========
AMIAD WATER SYSTEMS LTD.
(Formerly - Amiad Filtration Systems Ltd.)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended 31 December
-------------------------
2011 2010
------------ -----------
$ in thousands
except per share data
-------------------------
Revenue 117,276 89,431
Cost of sales 66,097 50,760
--------- ---------
Gross Profit 51,179 38,671
Research and development 1,838 836
Selling and marketing costs 28,157 22,746
Administrative and general expenses 12,293 11,608
Other gains (48) (777)
--------- ---------
Operating Profit 8,939 4,258
--------- ---------
Finance income 1,526 1,248
Finance costs (2,132) (2,030)
--------- ---------
Finance costs, net (606) (782)
--------- ---------
Profit before income taxes 8,333 3,476
Income tax expenses 1,293 419
--------- ---------
Profit for the year 7,040 3,057
========= =========
Other comprehensive income:
Currency translation differences (759) 595
Currency translation differences realised
due to business combination - (139)
--------- ---------
Total comprehensive income for the year 6,281 3,513
========= =========
Profit attributable to:
Equity holders of the Company 7,057 3,077
Non controlling interests (17) (20)
--------- ---------
7,040 3,057
========= =========
Total comprehensive income attributable
to:
Equity holders of the Company 6,320 3,542
Non controlling interests (39) (29)
--------- ---------
6,281 3,513
========= =========
$
----------------
Earnings per share attributable to the
equity
holders of the Company during the year
Basic 0.312 0.143
======= =======
Diluted 0.312 0.134
======= =======
AMIAD WATER SYSTEMS LTD.
(Formerly - Amiad Filtration Systems Ltd.)
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
========================= =========== ------------------------------------------------------------------------ ================ ========
Transaction
Currency with
Number of Share Capital translation non-controlling Retained Non-controlling Total
shares capital reserve reserve interest earnings Total interest equity
========================= ----------- -------- -------- ------------- ---------------- --------- -------- ---------------- --------
$ in thousands
========================= =========== ----------------------------------------------------------------------------------------------------
BALANCE AT 1 JANUARY
2010 19,237,531 2,342 13,305 243 16,085 31,975 147 32,122
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Comprehensive income :
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Profit for the year - - - - 3,077 3,077 (20) 3,057
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Other comprehensive
income
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Currency
translation
differences - - - 604 - 604 (9) 595
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Currency
translation
differences
realised
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
due to business
combination - - - (139) - (139) - (139)
========================= ----------- -------- -------- ------------- ---------------- --------- -------- ---------------- --------
Total comprehensive
income 465 3,077 3,542 (29) 3,513
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Transaction with
owners:
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Non controlling interest
arising
on business combination 172 172
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Issuance of shares
related to
business
combination 3,284,159 438 11,162 11,600 11,600
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Dividend ($0.063
per share) - - - - (1,419) (1,419) - (1,419)
========================= ----------- -------- -------- ------------- ---------------- --------- -------- ---------------- --------
Total transaction with
owners 3,284,159 438 11,162 - (1,419) 10,181 172 10,353
========================= ----------- -------- -------- ------------- ---------------- --------- -------- ---------------- --------
BALANCE AT 31 DECEMBER
2010 22,521,690 2,780 24,467 708 17,743 45,698 290 45,988
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Comprehensive income :
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Profit for the year 7,057 7,057 (17) 7,040
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Other comprehensive
income
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Currency
translation
differences (737) (737) (22) (759)
========================= ----------- -------- -------- ------------- ---------------- --------- -------- ---------------- --------
Total comprehensive
income (737) 7,057 6,320 (39) 6,281
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Transaction with
owners:
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Acquisition of non
controlling
interest 69,000 9 225 9 (180) 63 (155) (92)
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
Dividend ($0.107
per share) (2,417) (2,417) (2,417)
========================= ----------- -------- -------- ------------- ---------------- --------- -------- ---------------- --------
Total transaction with
owners 69,000 9 225 9 (180) (2,417) (2,354) (155) (2,509)
========================= ----------- -------- -------- ------------- ---------------- --------- -------- ---------------- --------
BALANCE AT 31 DECEMBER
2011 22,590,690 2,789 24,692 (20) (180) 22,383 49,664 96 49,760
========================= =========== ======== ======== ============= ================ ========= ======== ================ ========
AMIAD WATER SYSTEMS LTD.
(Formerly - Amiad Filtration Systems Ltd.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended 31 December
-------------------------
2011 2010
----------- ------------
$ in thousands
-------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash generated from operations 6,421 6,620
Interest paid (903) (719)
Interest received 289 148
Income taxes paid (3,942) (1,322)
----------- ------------
Net cash generated from operating activities 1,865 4,727
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of subsidiary, net of cash
acquired- Arkal - (9,159)
Acquisition of subsidiary, net of cash
acquired -China - (2,267)
Acquisition of subsidiary, net of cash
acquired -India - (182)
Acquisition of associate - (10)
Purchase of property, plant and equipment (3,980) (1,144)
Purchase of intangible assets and capitalised
development expenses (2,412) (175)
Investment grants received 218 -
Sale of financial assets at fair value
through
profit or loss, net 1,933 868
Proceeds from sale of property, plant
and equipment 122 109
Restricted deposit 259 (204)
Collection (granting) of long-term loan
granted to a related party and other 84 (58)
----------- ------------
Net cash used in investing activities (3,776) (12,222)
CASH FLOWS FROM FINANCING ACTIVITIES:
Acquisition of non controlling interest
-
Amiad France (92) -
Dividends paid to equity holders of
the Company (2,417) (1,419)
Receipt of long-term borrowings and
other liabilities 10,990 12,304
Repayments of long term borrowings (4,995) (2,771)
Short-term borrowings (repayments) from
banks, net (868) 2,007
----------- ------------
Net cash generated from financing activities 2,618 10,121
----------- ------------
EXCHANGE RATE GAIN (LOSS) ON CASH AND
CASH EQUIVALENTS (152) 92
NET INCREASE IN CASH AND CASH EQUIVALENTS 555 2,718
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 11,293 8,575
----------- ------------
CASH AND CASH EQUIVALENTS AT END OF
YEAR 11,848 11,293
=========== ============
This information is provided by RNS
The company news service from the London Stock Exchange
END
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