TIDMAFS
RNS Number : 3688R
Amiad Water Systems Ltd
11 September 2014
11 September 2014
Amiad Water Systems Ltd.
("Amiad" or the "Company")
Results for the six months to 30 June 2014
Amiad (AIM: AFS), a leading global producer of water treatment
and filtration solutions, announces its interim results for the six
months ended 30 June 2014.
Financial Summary
-- Revenue was $60.2m (H1 2013: $61.7m)
-- Operating profit was $2.1m (H1 2013: $4.2m)
-- Profit before tax was $1.7m (H1 2013: $4.2m)
-- Gross margin was 39.4% (H1 2013: 40.3%)
-- Fully diluted earnings per share was $0.049 (H1 2013: $0.147)
-- Net debt of $19.7m (31 December 2013: $13.7m; 30 June 2013: $16.9m)
-- Interim dividend of $0.022 per share (H1 2013: $0.051)
-- Cash and cash equivalents at 30 June 2014 were $14.7m (31
December 2013: $14.9m; 30 June 2013: $13.3m)
Operational Summary
-- Amiad returned to growth following the downturn in the second half of 2013
-- Irrigation segment revenues were slightly higher than H1 2013
and over 16% higher than H2 2013 due to return of projects delayed
from that period
-- Municipal segment in Israel, USA and Europe saw significant
increase in sales, resulting in revenues being 24% higher in this
segment compared with H1 2013
-- Overall, Industrial segment sales were broadly flat compared
with H1 2013, although revenue growth of 40% was achieved in US
compared with equivalent period last year
-- Sales in Oil & Gas segment were over 50% lower in H1 2014
compared with the same period of the prior year due to the
exceptionally large project in Colombia in H1 2013. Excluding the
Colombian project, the Oil & Gas segment revenues almost
tripled as a result of sales in Europe, Australia and South East
Asia
-- Postponement in implementation of coastguard regulations by
International Maritime Organization ("IMO") continued to impact
sales in Ballast Water segment
-- Sales from new products - Omega, Sigma and Super Galaxy -
contributed around 10% of overall revenues in H1 2014 compared with
1-2% of overall revenues in H1 2013, demonstrating the continuing
demand and technological lead of these products
Arik Dayan, Chief Executive Officer of Amiad, said: "Whilst the
first half results were down year-on-year, the increase over H2
2013 is a clear indication that Amiad is back to growth as the
global economy continues to improve.
"Looking ahead, the Company entered the second half of 2014 with
a higher backlog than at the equivalent period last year. We expect
the Municipal and Oil & Gas segments to accelerate in the
second half of the year and the Irrigation segment, particularly in
the US, to continue to show sustained momentum. Hence, we expect to
deliver revenue growth for full year 2014 compared with 2013 and,
despite the uncertainty surrounding the extent of the impact of the
NIS strength against the US Dollar, we still expect to report a
higher net profit than last year."
Enquiries
Amiad Water Systems Ltd.
-------------------------------------- -----------------
Arik Dayan, Chief Executive Officer
Amir Harel, Chief Financial Officer +972 4 690 9500
-------------------------------------- -----------------
Oriel Securities Ltd
-------------------------------------- -----------------
Juliet Thompson, Giles Balleny +44 20 7710 7600
-------------------------------------- -----------------
Luther Pendragon
-------------------------------------- -----------------
Harry Chathli, Claire Norbury,
Oli Hibberd +44 20 7618 9100
-------------------------------------- -----------------
About Amiad
Amiad Water Systems (AIM: AFS) 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
ten 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
In the first half of the year, the Company saw the Irrigation
segment and Municipal segments reporting revenues higher than H1
2013. The Industrial segment remained flat and the Oil & Gas
segment saw revenues reduce by over 50% due to the lack of a single
large project similar to that delivered in Colombia in H1 2013. As
a result, overall revenues for H1 2014 decreased by 2.5% to $60.2m
(H1 2013: $61.7m). However, revenues were up by 5% compared with H2
2013 - a clear indication of the Company's return to growth.
Specifically, the Irrigation and Industrial segments generated
$27.7m and $22.9m respectively during the period (H1 2013: $27.1m
and $22.8m), accounting for 46% and 38% respectively of the
Company's revenues. There was a resumption of demand in the
Municipal segment as it reported revenues 24% higher at $6.1m (10%
of the Company's revenues), compared with $4.9m in H1 2013. There
was a significant decline in sales in the Oil & Gas segment at
$2.7m (H1 2013: $5.7m) - 5% of overall revenues. However, this
decline was due to the delivery of a single large project in the
first half of 2013, valued at approximately $5m. The Company
continues to be impacted in the Ballast Water segment by the
postponement in the implementation of IMO regulations. Revenues in
this segment were $0.8m compared with $1.1m in H1 2013.
Amiad's portfolio of new products continue to be well-received
and are increasingly penetrating the market. In H1 2013, sales of
Omega, Sigma, ScanJet and Super Galaxy products all across the
globe reached an all-time high at approximately $6m, representing
10% of overall sales.
Global Activity
US and South America
Amiad performed well and achieved growth in all five segments in
the US, with Irrigation and Industrial segments being the best
performers. This was due to projects such as that awarded by
Newport News Shipbuilding (NNS), a division of Huntington Ingalls
Industries (HII), to supply Amiad automatic self-cleaning screen
filters for the aircraft carrier John F. Kennedy (CVN 79), the
second ship of the new class of US Navy aircraft carriers as well
as several Irrigation projects across the US.
The constraints on public funding and projects have continued to
persist, but not as much as during 2013. The Municipal segment
continues to penetrate the market and achieved increased sales. In
the first half, the Company completed several projects using
Amiad's automatic self cleaning filters and Arkal automatic disk
filters for algae removal, membrane protection and dust
abatement.
However, it was a disappointing period for sales in Latin
America. The Company continues to build an effective team and to
increase its presence locally.
EMEA
Amiad performed well in most segments in Europe - undertaking
significant work in Italy, Spain and France - thereby reporting an
increase in sales of 18% compared with the equivalent period last
year. In the Municipal, Oil & Gas and Industrial segments,
Amiad completed projects resulting in revenues increasing by
66%.
Asia
During the first half of the year, Amiad experienced weakness in
the Industrial segment in South East Asia. Revenues in China
declined by approximately 20% primarily due to reduced revenues
from the Industrial segment. Demand in India remained weak and so
revenues in that territory were broadly similar to H1 2013.
However, Amiad continued work on its production line at its Indian
and Chinese subsidiaries and expects to increase local production
next year. South East Asia saw a 16% improvement in revenues
compared with H1 2013 due to Oil & Gas and Municipal
projects.
Australia
The Industrial segment suffered in Australia from the weakness
in the Australian economy due to the reduced demand for raw
materials from China, Australia's largest export customer, which
has resulted in resource companies cancelling or postponing
projects. However, the Irrigation segment almost doubled its sales
due to several projects in protecting drip irrigation based on the
new Amiad self cleaning filters, Omega and Sigma. In addition, a
number of mining projects and a further project with Origin Energy,
one of Australia's leading integrated energy companies, providing
filtration for a coal seam gas to liquefied natural gas plant
contributed towards a marked improvement in sales in the Oil &
Gas segment.
Financial Review
Revenues for the six months ended 30 June 2014 decreased by 2.5%
to $60.2m compared with $61.7m for the first half of 2013. Fully
diluted earnings per share were $0.049 (H1 2013: $0.147).
Operating profit was $2.1m compared with $4.2m for the first
half of 2013, and profit before tax was $1.7m (H1 2013: $4.2m).
Gross margins were 39.4% (H1 2013: 40.3%). The decline was
mainly due to the weakness of the US dollar against the Israeli
shekel as well as slightly lower sales but the same fixed costs
compared with the prior year.
As of 30 June 2014, cash and cash equivalents were $14.7m (31
December 2013: $14.9m; 30 June 2013: $13.3m). Net debt increased to
$19.7m (31 December 2013: $13.7m; 30 June 2013: $16.9m). This was
mainly due to reduced net profits and an increase in working
capital, primarily for trade receivables as well as increased
levels of inventory and some capital investment.
Dividend
The Directors have decided to declare an interim dividend out of
the Company's profits for the six months ended 30 June 2014 of
$0.022 gross per share (interim dividend 2013: $0.051 gross per
share), with an ex dividend date of 9 October 2014, a record date
of 10 October 2014 and a payment date of 29 October 2014.
Outlook
As stated at the time of the Company's full year results on
April 2014, with an improving global economy, Amiad anticipates
returning to growth for full year 2014.
Amiad entered the second half of 2014 with a higher backlog than
at the equivalent period last year. The Company expects the
Municipal and Oil & Gas segments to grow in the second half of
the year and the Irrigation segment, particularly in the US, to
continue to show sustained momentum. The Industrial segment remains
stable and is performing as expected. Hence, the Company
anticipates delivering revenue growth for full year 2014 compared
with 2013. Despite the uncertainty surrounding the extent of the
impact of the NIS strength against the US Dollar, the Company still
expects to report a higher net profit than last year. In addition,
the Company expects to be able to maintain efficiency measures and
tight cost control over the course of 2014.
.
AMIAD WATER SYSTEMS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2014
June 30 December
31,
------------------
2014 2013 2013
-------- -------- ----------
(Unaudited) (Audited)
------------------ ----------
U.S. dollars in thousands
------------------------------
Assets
CURRENT ASSETS:
Cash and cash equivalents 14,743 13,267 14,871
Financial assets at fair value through
profit or loss 44 1,243 480
Accounts receivable and accruals:
Trade 46,916 44,096 41,560
Other 5,105 3,599 3,501
======== ======== ========
Income tax assets 775 1,130 367
Inventories 26,097 22,556 25,277
-------- -------- --------
T o t a l current assets 93,680 85,891 86,056
-------- -------- --------
NON-CURRENT ASSETS:
Investment in joint venture 10 24 -,-
Severance pay fund, net 254 169 261
Loan to a related party -,- 633 100
Long-term receivables 46 104 36
Prepaid expenses -,- 104 -,-
Property and equipment 11,094 11,399 11,449
Intangible assets 16,508 16,879 16,846
Deferred income tax assets 2,064 1,678 1,721
-------- -------- --------
T o t a l non-current assets 29,976 30,990 30,413
-------- -------- --------
T o t a l assets 123,656 116,881 116,469
======== ======== ========
AMIAD WATER SYSTEMS LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2014
June 30 December
31,
------------------
2014 2013 2013
-------- -------- ----------
(Unaudited) (Audited)
------------------ ----------
U.S. dollars in thousands
------------------------------
Liabilities and equity
CURRENT LIABILITIES:
Short-term credit and current maturities
of
borrowings from banks 20,987 15,719 10,544
Financial liabilities at fair value
through profit or
loss - derivatives 86 93 63
Accounts payable and accruals:
Trade 18,956 16,972 19,670
Other 9,891 9,103 9,433
Put option liability 2,204 -,- 2,204
Current income tax liability 735 365 529
Dividend payable 499 1,360 -,-
--------- --------- ---------
T o t a l current liabilities 53,358 43,612 42,443
--------- --------- ---------
NON-CURRENT LIABILITIES:
Borrowings from banks and others
(net of current maturities) 13,444 14,403 17,988
Investment in joint venture -,- -,- 110
Put option liability -,- 1,924 -,-
Accrued severance pay 340 340 381
--------- --------- ---------
T o t a l non-current liabilities 13,784 16,667 18,479
--------- --------- ---------
T o t a l liabilities 67,142 60,279 60,922
--------- --------- ---------
EQUITY:
Capital and reserves attributable
to
equity holders of the Company:
Share capital 2,798 2,798 2,798
Capital reserves 28,332 28,161 28,271
Currency translation reserve (1,218) (1,016) (1,416)
Transaction with non controlling
interest (180) (180) (180)
Retained earnings 26,830 26,862 26,082
--------- --------- ---------
56,562 56,625 55,555
NON CONTROLLING INTEREST (48) (23) (8)
--------- --------- ---------
T o t a l equity 56,514 56,602 55,547
--------- --------- ---------
T o t a l liabilities and equity 123,656 116,881 116,469
========= ========= =========
AMIAD WATER SYSTEMS LTD.
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2014
Six months ended Year ended
June 30 December 31,
--------------------
2014 2013 2013
--------- --------- -------------
(Unaudited) (Audited)
-------------------- -------------
U.S dollars in thousands
except per share data
-----------------------------------
REVENUE 60,217 61,746 118,787
COST OF SALES 36,477 36,832 70,360
---------- -------- -------------
GROSS PROFIT 23,740 24,914 48,427
RESEARCH AND DEVELOPMENT EXPENSES 1,759 1,478 3,357
SELLING AND MARKETING EXPENSES 14,349 13,261 27,456
ADMINISTRATIVE AND GENERAL EXPENSES 5,586 5,950 11,929
OTHER LOSSES (INCOME) NET (52) (6) (27)
---------- -------- -------------
OPERATING PROFIT 2,098 4,231 5,712
---------- -------- -------------
FINANCIAL INCOME (275) (1,353) (1,901)
FINANCE EXPENSES 713 1,319 2,278
---------- -------- -------------
FINANCE EXPENSES (INCOME) - NET 438 (34) 377
SHARE OF PROFIT OF ASSOCIATES -,- 50 188
---------- -------- -------------
INCOME BEFORE TAXES ON INCOME 1,660 4,215 5,147
INCOME TAX EXPENSES 452 889 1,499
---------- -------- -------------
INCOME FOR THE PERIOD 1,208 3,326 3,648
========== ======== =============
OTHER COMPREHENSIVE INCOME-
Items that may be subsequently reclassified
to profit or loss:
Currency translation differences (197) 868 1,271
Items that will not be reclassified to
profit or loss:
Remeasurements of post- employment benefits
obligations -,- -,- 72
---------- -------- -------------
(197) 868 1,199
---------- -------- -------------
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 1,405 2,458 2,449
========== ======== =============
PROFIT FOR THE PERIOD ATTRIBUTED TO:
Equity holders of the Company 1,247 3,396 3,700
Non controlling interest (39) (70) (52)
---------- -------- -------------
1,208 3,326 3,648
========== ======== =============
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE
TO:
Equity holders of the Company 1,445 2,527 2,503
Non controlling interest (40) (69) (54)
---------- -------- -------------
1,405 2,458 2,449
========== ======== =============
U.S dollars
-----------------------------------
EARNINGS PER SHARE:
Attributable to the equity holders of
the company during the period:
Basic 0.053 0.147 0.163
========== ======== =============
Diluted 0.049 0.147 0.153
========== ======== =============
(Continued) - 1
AMIAD WATER SYSTEMS LTD.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2014
Attributable to owners of the parent
-----------------------------------------------------------------------
Transaction
Currency with Non-
Number non
of Share Capital translation controlling Retained controlling
Interest Total
shares capital Reserve reserve earning Total interest equity
------------ -------- -------- ------------ ------------ --------- ------------ ------------ ----------
U.S dollars in thousands
-------------------------------------------------------------------------------------------------
BALANCE AT JANUARY 1, 2014
(audited) 22,663,651 2,798 28,271 (1,416) (180) 26,082 55,555 (8) 55,547
CHANGES DURING THE SIX MONTH
ENDED
JUNE 30, 2014
(unaudited):
Comprehensive income -
Profit for the
period 1,247 1,247 (39) 1,208
Other comprehensive
income
-
Currency translation
differences 198 198 (1) 197
------------ --------- ------------ ------------ ----------
Total comprehensive
income 198 1,247 1,445 (40) 1,405
Transaction with owners:
Recognition of
compensation
related
stock and option
grants 61 61 61
Dividend ($0.022 per
share) (499) (499) (499)
-------- --------- ------------ ----------
Total transactions with
owners 61 (499) (438) (438)
----------- -------- -------- ------------ ------------ --------- ------------ ------------ ----------
BALANCE AT JUNE 30, 2014
(unaudited) 22,663,651 2,798 28,332 (1,218) (180) 26,830 56,562 (48) 56,514
=========== ======== ======== ============ ============ ========= ============ ============ ==========
BALANCE AT JANUARY 1, 2013
(audited) 22,663,651 2,798 28,029 (147) (180) 24,826 55,326 46 55,372
CHANGES DURING THE SIX MONTH
ENDED
JUNE 30, 2013
(unaudited):
Comprehensive income -
Profit for the
period 3,396 3,396 (70) 3,326
Other comprehensive
income
-
Currency translation
differences (869) (869) 1 (868)
------------ --------- ------------ ------------ ----------
Total comprehensive
income (869) 3,396 2,527 (69) 2.458
Transaction with owners:
Recognition of
compensation
related
stock and option
grants 132 132 132
Dividend ($0.06 per
share) (1,360) (1,360) (1,360)
-------- --------- ------------ ----------
Total transactions with
owners 132 (1,360) (1,228) (1,228)
----------- -------- -------- ------------ ------------ --------- ------------ ------------ ----------
BALANCE AT JUNE 30, 2013
(unaudited) 22,663,651 2,798 28,161 (1,016) (180) 26,862 56,625 (23) 56,602
=========== ======== ======== ============ ============ ========= ============ ============ ==========
(Concluded) - 2
AMIAD WATER SYSTEMS LTD.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2014
Attributable to owners of the parent
--------------------------------------------------------------------------------------
Transaction
Currency with non- Non-
Number of Share Capital translation Controlling Retained controlling
Interest Total
shares capital reserve reserve earning Total interest equity
----------- -------- -------- ------------ ------------ --------- -------------- ------------ ---------
U.S dollars in thousands
----------- --------------------------------------------------------------------------------------------------
Balance at 1 January 2013 22,663,651 2,798 28,029 (147) (180) 24,826 55,326 46 55,372
Comprehensive income -
Profit for the period 3,700 3,700 (52) 3,648
Other comprehensive income
Currency translation
differences (1,269) (1,269) (2) (1,271)
Remeasurement of net
defined
benefit
liability 72 72 72
------------ --------- -------------- ------------ ---------
Total comprehensive income (1,269) 3,772 2,503 (54) 2,449
Transaction with owners:
Recognition of
compensation
related to
employee stock
and options
grants 242 242 242
Dividend ($0.106 per
share) (2,516) (2,516) (2,516)
-------- --------- -------------- ---------
Total transaction with owners 242 (2,516) (2,274) (2,274)
----------- -------- -------- ------------ ------------ --------- -------------- ------------ ---------
Balance at 31 December 2013 22,663,651 2,798 28,271 (1,416) (180) 26,082 55,555 (8) 55,547
=========== ======== ======== ============ ============ ========= ============== ============ =========
AMIAD WATER SYSTEMS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2014
Six months ended Year ended
June 30 December 31,
---------------------
2014 2013 2013
--------- ---------- --------------
(Unaudited) (Audited)
--------------------- --------------
U.S dollars in thousands
-------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash generated from (used in) operations (3,700) 2,730 9,547
Interest paid (433) (382) (815)
Interest received 41 78 273
Income tax paid (842) (1,462) (926)
--------- --------- ---------------
Net cash generated from (used in) operating
activities (4,934) 964 8,079
--------- --------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (838) (1,085) (2,406)
Purchases of intangible assets and capitalized
development
Expenses (357) (339) (756)
Investments grants received -,- 112 130
Restricted deposit (48) 912 718
Proceeds from sale of property and equipment 29 12 40
Collection (payments) of long-term loan
to a related party 40 (13) 637
--------- --------- ---------------
Net cash used in investing activities (1,174) (401) (1,637)
--------- --------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid to equity holders of the
Company -,- -,- (2,516)
Receipt of long-term borrowings and other
liabilities 51 20 8,570
Repayments of long term borrowings (4,488) (3,746) (7,452)
Short-term borrowings (repayments) from
banks, net 10,368 2,422 (3,932)
--------- --------- ---------------
Net cash generated from (used in) financing
activities 5,931 (1,304) (5,330)
--------- --------- ---------------
EXCHANGE GAIN (LOSS) ON CASH AND CASH
EQUIVALENTS 49 (247) (496)
--------- --------- ---------------
NET INCREASE IN CASH AND CASH EQUIVALENTS (128) (988) 616
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 14,871 14,255 14,255
--------- --------- ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD 14,743 13,267 14,871
========= ========= ===============
This information is provided by RNS
The company news service from the London Stock Exchange
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