TIDMAFS
RNS Number : 9646B
Amiad Water Systems Ltd
10 April 2013
10 April 2013
Amiad Water Systems Ltd.
("Amiad" or "the Company")
Results for the twelve months to 31 December 2012
Amiad, a leading global producer of water treatment and
filtration solutions, announces its full year results for the
twelve months ended 31 December 2012.
Financial Summary
-- Revenue increased by 11.8% to $131.1m (2011: $117.3m)
-- Operating profit was $10.6m (2011: $8.9m)
-- Profit before tax was $10.1m (2011: $8.3m)
-- Gross margins at 43% (2011: 44%)
-- Fully diluted earnings per share was $0.340 (2011: $0.312)
-- Final dividend for 2012 of $0.06 per share (2011: $0.055),
making a total dividend for the year of $0.111 (total dividend for
2011: $0.104)
-- Cash and cash equivalents at 31 December 2012 were $14.5m (30
June 2012: $12.7m; 31 December 2011: $11.8m)
Operational Summary
Traditional Segments (Irrigation, Industrial and Municipal)
-- Strong growth achieved in the Municipal segment, primarily
due to the delivery of a significant contract in Australia for
seawater reverse osmosis membrane protection
-- Irrigation segment revenues increased in most geographies
except Europe, with particular strength in the US, to achieve
overall growth for the year
-- Revenues in the Industrial segment were broadly similar with
the prior year due to weakness in the US, Europe and China
New Developing Segments (Ballast Water and Oil & Gas)
-- Significant increase in the contribution to revenues from
Amiad's new segments of Ballast Water and Oil & Gas
-- Sales particularly strong in the Ballast Water segment in the US
-- Signed a long-term supply agreement with Calgon Carbon
Corporation (NYSE: CCC) ("Calgon") for incorporation of Arkal
technology in Calgon's Hyde GUARDIAN(R) Ballast Water Treatment
Systems
-- Secured significant contract in the Oil & Gas segment for
pre-filtration membrane protection in Australia
Commenting on the results, Arik Dayan, Chief Executive Officer
of Amiad, said: "We are pleased to report our third consecutive
year of growth, despite experiencing weakness in certain key
markets in the final quarter of the year. This growth was as a
result of increasing contributions from our new Ballast Water and
Oil & Gas segments and better-than-expected turnover in
Australia, which more than offset the slowdown in our traditional
territories of the US and Europe where we suffered from the
continuing economic difficulties, primarily in the Municipal and
Industrial segments.
"Looking ahead, the headwinds experienced in the US and Europe
are expected to continue in the first half of the year as large
water infrastructure projects suffer delays in investment. However,
we anticipate that the Company will achieve a slight increase in
revenues for full year 2013 and implement a number of efficiency
measures over the course of the year. We believe that Amiad has the
right solutions, is in the right markets and has the right sales
and marketing channels to continue to grow and deliver value to
shareholders in 2013 and beyond."
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
------------------------------- -----------------
About Amiad
Amiad Water Systems (AIM: AFS) (formerly Amiad Filtration
Systems Limited) is a leading global producer of automatic,
self-cleaning water treatment and filtration products and systems.
Through its engineering skills and ability to innovate, Amiad
provides cost-effective "green" solutions for the industrial,
municipal, irrigation, oil & gas and ballast water markets. In
these segments its patented products are being integrated into the
core of systems for filtration and water treatment, micro
irrigation and membrane protection, wastewater and potable water
treatment, cooling systems and sea water filtration.
Headquartered in Israel, Amiad provides these solutions through
nine subsidiaries and a comprehensive network of over 170
distributors to customers in more than 80 countries.
For additional information or product details, please visit
www.amiad.com
Operational Review
The revenue momentum from 2011 continued in 2012 with Amiad
achieving growth of 11.8% to $131.1m (2011: $117.3m). This was a
result of significant revenue growth in the Municipal segment as
well as the new segments of Ballast Water and Oil & Gas, whilst
revenues in the traditional segments of Irrigation and Industrial
remained flat. Gross margins were broadly similar at 43% compared
with 44% for 2011.
Revenues in the second half of 2012 were $64.7m compared with
$58.3m in the second half of 2011, with the increase primarily due
to growth in the Municipal segment. For the full year 2012, the
Municipal segment grew by 80%, with the segment constituting 13.6%
of the Company's revenues for the period (2011: 8.3%). The
Irrigation and Industrial segments contributed $50.9m and $52.3m
respectively in 2012, which is broadly similar to 2011.
The two new developing segments of Ballast Water and Oil &
Gas accounted for approximately 4.4% and 3.3% of 2012 revenues
respectively, compared with 3.1% and 2% in the prior year. Revenue
in the Ballast Water segment was slightly less than expected at
$5.8m (2011: $3.6m) due to a postponement in the implementation of
coastguard regulations by the International Maritime Organization
("IMO"), which will now come into force in 2014. However, the
Ballast Water segment remains a significant growth market and the
Company is well-positioned to benefit from this development due to
the strength of its product portfolio and channels to market,
particularly through its relationship with Calgon. Additionally,
the Company intends to form partnerships with other integrators in
this segment.
Progress was made with Amiad's new products that were launched
in November 2011. The Arkal AR-3 (Super Flow 70) contributed to
2012 revenues in the Ballast Water segment in the US and the Arkal
AR-1 (Super Galaxy), which is in the commissioning phase for the
Ashdod Desalination Plant in Israel, also began generating revenue.
Post period-end, the Company received orders for the Amiad AM-2
(Omega) in India and Europe for cooling process water filtration in
the Industrial segment as well as membrane protection in Europe.
The remaining products are in the piloting phase and are being
well-received.
At the Company's Beit Zera site in Israel, construction was
completed on a new factory for injection moulding to produce
combined Amiad-Arkal polymer-based products. Amiad has identified a
significant growth potential for polymer-based products,
particularly for the Ballast Water industry, and the new factory
represents part of the Company's strategy for targeting this
area.
Global Activity
Asia
The Company experienced a significant decline in revenues in
China compared with the prior year. This decrease was due to
weakness in the steel mill market, which has traditionally
constituted a substantial proportion of revenues for that
territory. However, there was an increase in sales in the
Municipal, Oil & Gas and Irrigation segments. During the second
half of the year, there was a growth in the funding of large
irrigation projects, which has continued into the current year. The
Company expects revenues in the Irrigation segment to increase
further in 2013, which is partly due to trade agreements signed
between the Chinese and Israeli governments.
Revenues in South East Asia were broadly in line with 2011.
Amiad delivered projects in the Oil & Gas segment and for
Hyundai in the Municipal segment. In addition, the Company is
currently conducting a pilot test with the Amiad AM-2 (Omega) and
Arkal Galaxy disc filtration technology for a potential customer in
the Ballast Water segment in Singapore.
Amiad performed well in India, with revenues for 2012 over 200%
greater than in 2011, albeit from a small revenue contribution.
This growth is primarily from the Industrial segment, with projects
in the power generation sector and with steel factories - although,
in part, the extent of the growth is reflective of severe weakness
in 2011. The Company also experienced growth in the Irrigation
segment and, post period end, completed the successful
commissioning of a pre-filtration solution, based on its Arkal
Galaxy Disc filtration technology, at a newly-built municipal
seawater desalination plant in Chennai, India. The production line
at Amiad's subsidiary in India is now functioning at almost full
capacity. In addition, Amiad delivered its first project in India
in the Irrigation segment that utilises the Company's automatic
self-cleaning technology, which reflects the increasing maturity of
the market in India.
US and Latin America
In the US, Amiad achieved its second consecutive year of
significant growth, which was primarily due to strength in the
Ballast Water and Irrigation segments, and despite experiencing a
marked slowdown in the Municipal and Industrial segments. During
the first half of the year, the Company signed a long-term supply
agreement with Calgon Carbon Corporation to provide its Arkal
automatic self-cleaning disc filtration technology for
incorporation within Calgon's Hyde GUARDIAN Ballast Water Treatment
Systems. Momentum continued in the Irrigation segment in the US,
with a growth rate of 18%, driven primarily by an increase in
farming and food consumption, particularly on the West Coast.
However, there was a decline in the Industrial and Municipal
segments due to economic weakness, public debt and a slowdown in
activity in the public sector ahead of the political elections.
During the year, the Company established a wholly-owned
subsidiary in Mexico, Amiad Mexico SA de CV ("Amiad Mexico"), to
increase its presence in the growth markets of Latin America. The
demand for Amiad's solutions in Mexico is primarily from the
Municipal, Oil & Gas and Industrial segments. Amiad Mexico is
currently delivering a project in the pharmaceutical industry,
which represents a new sector for the Company. Following the
establishment in the second half of 2011 of Amiad Sistemas De Agua
Ltda ("Amiad Brazil"), the subsidiary won a number of projects in
the Oil & Gas industry for cooling process water
filtration.
EMEA
The Company experienced a significant decrease in revenues in
Europe as a result of a decline in investment in infrastructure
projects due to economic weakness. This decline applied to all of
Amiad's traditional segments. In the Oil & Gas segment, Amiad
delivered a significant project in France where it provided a salt
leaching brine filtration system at an underground liquid
hydrocarbon storage facility. Similarly, Amiad installed two new
projects with existing customers in Eastern and Western Russia
respectively: the former is to provide pre-filtration for reverse
osmosis membrane protection for process water and the latter is for
iron ore removal from well water at a municipal treatment plant to
produce potable water. In addition, Amiad is currently conducting a
pilot test with the Amiad AM-2 (Omega) in the Ballast Water segment
in Europe.
In Israel, Amiad signed a contract, valued at $1.67m, to provide
an Arkal AR-1 (Super Galaxy) automatic disc filtration system
(SpinKlin R) for the protection of ultra-filtration membranes at
the Ashdod Desalination Plant, which is being operated by the
Mekorot Group, Israel's national water company. Amiad began to
supply the units during the year and installation occurred in March
2013, with the plant now being in the pre-commissioning phase.
Amiad achieved its second consecutive year of growth in Turkey,
primarily due to projects in the Municipal segment, and experienced
an increase in interest in Africa due to expanding demand for
infrastructure projects and irrigation. The Company expects these
trends to continue in 2013 and beyond.
Australia
Amiad achieved its greatest annual turnover in Australia to
date, which was primarily due to two significant contracts, valued
at approximately $8m and $1.6m respectively, for reverse osmosis
and pre-filtation membrane protection for projects in the
desalination and oil & gas industries. The larger of the
projects involved the supply and commissioning of the Company's
Amiad automatic self-cleaning screen filter technology for seawater
reverse osmosis membrane protection at the Southern SeaWater
Desalination Plant, which is located in Binningup, south of Perth.
The other contract was with Origin Energy, one of Australia's
leading integrated energy companies, for the supply and
commissioning of the Company's Arkal automatic self-cleaning disc
technology (Spin Klin Galaxy) for Origin's Australia Pacific LNG
project for the processing of coal seam gas to liquefied natural
gas. Amiad's solution performs pre-filtration to ensure membrane
protection during the process.
Financial Review
Revenues for the twelve months ended 31 December 2012 increased
by 11.8% to $131.1m compared with $117.3m for the full year
2011.
Fully diluted earnings per share was $0.340 (2011: $0.312).
Operating profit was $10.6m compared with $8.9m in 2011 and
profit before tax was $10.1m (2011: $8.3m).
Gross margins were broadly similar at 43% compared with 44% in
2011. This slight decline was primarily due to additional
provisions for slow inventory of approximately $0.8m.
As of 31 December 2012, cash and cash equivalents in the bank
were $14.5m compared with $12.7m at 30 June 2012 and $11.8m at 31
December 2011. Net debt at year end was $17.1m, a reduction of
$4.6m from $21.7m at 31 December 2011. The decrease in net debt was
primarily due to strong cash flow from operations, offset by cash
used in investing activities and dividend payments.
Dividend
The Directors have decided to declare a final dividend out of
the Company's profits for the twelve months ended 31 December 2012
of $0.06 gross per share (final dividend 2011: $0.055 gross per
share), with an ex dividend date of 12 June 2013, a record date of
14 June 2013 and a payment date of 8 July 2013. This makes a total
dividend for the year of $0.111 per share (total dividend for 2011:
$0.104 gross per share).
Outlook
The Board of Amiad remains confident that the Company's growth
prospects are significant. The Company expects 2013 to be a
transitional year as its new products gain traction, markets
recover in its established segments and it continues to benefit
from the increasing demand for solutions in the new segments of
Ballast Water and Oil & Gas, as well as in its identified
growth markets.
Amiad entered 2013 with a slightly higher backlog than at the
same period in the prior year. However, the slowdown observed in
the final quarter of 2012 in Europe and the US, particularly in the
Municipal and Industrial segments, has continued into the first
half of the year. The Company expects this weakness to be offset
slightly by activity in its growth territories in the second half
of the year. In addition, the Irrigation segment is expected to
continue to grow through the year as expected, and Amiad still
expects good growth in the Ballast Water segment. However, as a
result of the postponement in the implementation of the IMO
regulations, some of the revenues that the Company had anticipated
in the first half of 2013 have been delayed to the second half of
2013 and 2014.
Despite the headwinds, the Company still expects a slight growth
in revenues for full year 2013, with the second half being stronger
than the first half of 2013. In addition, the Company expects to be
able to increase efficiency measures and implement cost reductions
over the course of 2013.
AMIAD WATER SYSTEMS LTD.
(Formerly - Amiad Filtration Systems Ltd.)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
-----------------
2012 2011
-------- -------
$ in thousands
-----------------
Assets
CURRENT ASSETS:
Cash and cash equivalents 14,450 11848,
Financial assets at fair value
through profit
or loss 1,140 442
Trade and other receivables:
Trade 40,779 40,913
Other 5,367 4,277
======== ========
Inventories 26,033 29643,
Current income tax assets 701 2007,
-------- --------
Total Current Assets 88,470 89,130
-------- --------
NON-CURRENT ASSETS:
Investment in associates 10 10
Loans to a related party 535 558
Severance pay fund, net 112
Long-term receivables 72 397
Prepaid expenses 49 228
Property, plant and equipment 11,621 9,014
Intangible assets 19,351 19,287
Deferred income tax assets 2,035 1,503
-------- --------
Total Non Current Assets 33,673 31,109
-------- --------
Total Assets 122,143 120,239
======== ========
AMIAD WATER SYSTEMS LTD.
(Formerly - Amiad Filtration Systems Ltd.)
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
-----------------
2012 2011
-------- -------
$ in thousands
-----------------
Liabilities and Equity
CURRENT LIABILITIES:
Short-term credit and current maturities
of
borrowings from bank 13,421 16,686
Financial liabilities at fair value
through
profit or loss- derivatives 112 816
Trade and other payable:
Trade 19,820 24,387
Other 10,518 8,797
Current income tax liability 962 404
--------- ---------
Total Current Liabilities 44,833 51,090
--------- ---------
NON CURRENT LIABILITIES:
Borrowings from banks
(net of current maturities) 18,158 16,829
Put option liability 3,664 2,553
--------- ---------
Accrued severance pay ,net 115
--------- ---------
Deferred income tax liabilities 1 7
--------- ---------
Total Non Current Liabilities 21,938 19,389
--------- ---------
Total Liabilities 66,771 70,479
--------- ---------
EQUITY:
Capital and reserves attributable
to
equity holders of the Company:
Share capital 2,798 2,789
Capital reserves 28,029 24,692
Transaction with non-controlling
interests (180) (180)
Currency translation reserve (147) (20)
Retained earnings 24,826 22,383
--------- ---------
55,326 49,664
Non-controlling interests 46 96
--------- ---------
Total Equity 55,372 49,760
--------- ---------
Total Liabilities and Equity 122,143 120,239
========= =========
AMIAD WATER SYSTEMS LTD.
(Formerly - Amiad Filtration Systems Ltd.)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended 31 December
-------------------------
2012 2011
------------ -----------
$ in thousands
except per share data
-------------------------
Revenue 131,091 117,276
Cost of sales 74,877 66,097
--------- ---------
Gross Profit 56,214 51,179
Research and development 2,898 1,838
Selling and marketing costs 29,446 28,157
Administrative and general expenses 13,239 12,293
Other gains 60 (48)
--------- ---------
Operating Profit 10,571 8,939
--------- ---------
Finance income 1,365 1,526
Finance costs (1,830) (2,132)
--------- ---------
Finance costs, net (465) (606)
--------- ---------
Profit before income taxes 10,106 8,333
Income tax expenses 2,079 1,293
--------- ---------
Profit for the year 8,027 7,040
========= =========
Other comprehensive income:
Currency translation differences (128) (759)
--------- ---------
Total comprehensive income for the year 7,899 6,281
========= =========
Profit attributable to:
Equity holders of the Company 8,076 7,057
Non controlling interests (49) (17)
--------- ---------
8,027 7,040
========= =========
Total comprehensive income attributable
to:
Equity holders of the Company 7,949 6,320
Non controlling interests (50) (39)
--------- ---------
7,899 6,281
========= =========
$
----------------
Earnings per share attributable to the
equity
holders of the Company during the year
Basic 0.355 0.312
======= =======
Diluted 0.340 0.312
======= =======
AMIAD WATER SYSTEMS LTD.
(Formerly - Amiad Filtration Systems Ltd.)
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Attributable to equity holders of the Company
-------------------------------------------------------------------------------------------
Transaction Non
Currency with controlling
Number Share Capital translation non-controlling Retained Total
of shares capital reserve reserve interest earnings Total interest Equity
----------- -------- -------- ------------- ---------------- --------- ------------ ------------------
$ in thousands
---------------------------------------------------------------------------------------------------------------
BALANCE AT 1 JANUARY 2011 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
=========== ======== ======== ============= ================ ========= ============ ============= ==================
Comprehensive income:
Profit for the year 8,076 8,076 (49) 8,027
Other comprehensive
income (127) (127) (1) (128)
----------- -------- -------- ------------- ---------------- --------- ------------ ------------- ------------------
Total comprehensive
income (127) 8,076 7,949 (50) 7,899
Transaction with owners:
Issuance of shares
to a senior
employee 72,961 9 102 111 111
Allocation of share
capital 3,235 (3,235)
Dividend ($0.106
per share) (2,398) (2,398) (2,398)
----------- -------- -------- ------------- ---------------- --------- ------------ ------------- ------------------
Total transaction with
owners 72,691 9 3,337 (5,633) (2,287) (2,287)
----------- -------- -------- ------------- ---------------- --------- ------------ ------------- ------------------
BALANCE AT 31 DECEMBER 2012 22,663,651 2,798 28,029 (147) (180) 24,826 55,326 46 55,372
=========== ======== ======== ============= ================ ========= ============ ============= ==================
AMIAD WATER SYSTEMS LTD.
(Formerly - Amiad Filtration Systems Ltd.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended 31 December
-------------------------
2012 2011
------------ -----------
$ in thousands
-------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash generated from operations 15,326 6,421
Interest paid (1,054) (903)
Interest received 325 289
Income taxes paid (677) (3,942)
-------- --------
Net cash generated from operating activities 13,920 1,865
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (5,062) (3,980)
Purchase of intangible assets and capitalized
development expenses (1,386) (2,412)
Investment grants received 499 218
Sale of financial assets at fair value
through
profit or loss, net 1,933
Proceeds from sale of property, plant
and equipment 122 122
Restricted deposit (1,254) 259
Collection (granting) of long-term loan
granted to a related party and other 127 84
-------- --------
Net cash used in investing activities (6,954) (3,776)
CASH FLOWS FROM FINANCING ACTIVITIES:
Acquisition of non controlling interest
-
Amiad France (92)
Dividends paid to equity holders of
the Company (2,398) (2,417)
Proceeds from exercise of option 111
Receipt of long-term borrowings 9,811 10,990
Repayments of long term borrowings (6,930) (4,995)
Repayments of short-term borrowings
from banks (5,080) (868)
-------- --------
Net cash generated used to financing
activities (4,486) 2,618
-------- --------
EXCHANGE RATE GAIN (LOSS) ON CASH AND
CASH EQUIVALENTS 122 (152)
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,602 555
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 11,848 11,293
-------- --------
CASH AND CASH EQUIVALENTS AT END OF
YEAR 14,450 11,848
======== ========
This information is provided by RNS
The company news service from the London Stock Exchange
END
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