TIDMAFS
RNS Number : 8949L
Amiad Water Systems Ltd
11 September 2019
11 September 2019
Amiad Water Systems Ltd.
("Amiad" or the "Company")
Interim Results
Amiad (AIM: AFS), a leading global producer of water treatment
and filtration solutions, announces its interim results for the six
months ended 30 June 2019.
Financial Summary*
-- Revenue of $58.4m (H1 2018: $56.2m)
-- Gross margin of 39.2% (H1 2018: 42.2%)**, primarily due to sales mix and exchange rate impact
-- Operating profit of $2.5m (H1 2018: $3.1m)
-- Profit before tax of $0.9m (H1 2018: $2.2m), primarily reflecting the impact of IFRS 16
-- Fully diluted earnings per share of $0.026 (H1 2018: $0.056)
-- Net debt at 30 June 2019 was $14.4m (31 December 2018: $13.8m)
-- Cash and cash equivalents at 30 June 2019 were $14.1m (31 December 2018: $13.5m)
* H1 2018 financials have not been restated for IFRS 16, in
accordance with the available exemption.
** During the period, Amiad reclassified certain expenses from
'cost of sales' to 'selling and marketing' expenses. The Company
has retrospectively applied this reclassification to the prior
period and restated the gross margin.
Operational Summary
-- Positive sales momentum:
-- Growth in sales in all of the Company's geographic regions
-- Increase in revenue in both the Irrigation and Industry business units
-- Revenue generated under distribution agreement with Netafim increased by 8.5%
-- Received growing interest in new irrigation product range and
TEQUATIC(TM) PLUS Filter, which is expected to translate to ramp up
in sales in H2 2019
-- Improved operations:
-- Increase in total revenue achieved on consistent cost base
-- Implemented further internal efficiency measures, such as introducing automation to additional manufacturing processes
Dori Ivzori, Chief Executive Officer of Amiad, said: "With this
set of results, we are beginning to see the operational benefits of
our strategic plan as we achieved an increase in revenue without
expanding the cost base. This was based on sales growth in all
three of our geographic regions and in both the Irrigation and
Industry business units. We were also pleased to see a return to
growth in revenue generated under our agreement with Netafim.
During the period, however, we experienced currency headwinds and
the adoption of IFRS 16 had a negative impact on the financial
reporting. Nonetheless, we are pleased with the operational
progress that we achieved during the period.
"Looking ahead, we entered the second half of 2019 with a higher
backlog than at the same point of the prior year as well as a
larger sales pipeline, which we expect to convert to orders during
the rest of this year. In particular, we expect a ramp up in sales
of the new irrigation products to contribute to growth in the
Irrigation business unit while the TEQUATIC(TM) PLUS Filter is
expected to contribute to growth in the Industry business unit. We
also anticipate an improvement in gross margin for the full year
over the first half of 2019. We expect to experience currency
fluctuations in H2, but the full extent is not known presently.
Despite this, we anticipate good revenue growth for full year 2019,
broadly in line with market expectations, and the Board looks to
the future with confidence."
Enquiries
Amiad Water Systems Ltd.
Dori Ivzori, Chief Executive
Officer
Avishay Afriat, Chief Financial
Officer +972 4 690 9500
-----------------
Stifel Nicolaus Europe Ltd.
-----------------
Stewart Wallace, Ben Maddison +44 20 7710 7600
-----------------
Luther Pendragon Ltd.
-----------------
Harry Chathli, Claire Norbury +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
irrigation and industrial purposes. In these markets, 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 distributors to
customers in more than 80 countries.
For additional information or product details, please visit
www.amiad.com.
Operational Review
During the first half of 2019, Amiad recognised the initial
benefits from the implementation of the Company's strategic plan
established in 2017 as it delivered an increase in revenue without
expanding the cost base. This was based on modest growth in most of
the Company's geographies, and the Irrigation and Industry business
units. In Irrigation, there was an increase in the Company's direct
sales as well as in revenue generated under its distribution
agreement with Netafim.
The Company's new products - the Sigma series for the Irrigation
market and the TEQUATIC(TM) PLUS Filter in the Industry business
unit - generated initial sales and continued to receive growing
interest, with a ramp up in sales expected in the second half.
Amiad continued with the implementation of measures to increase
internal efficiency. In particular, the Company introduced
automation to additional manufacturing processes and expects to
benefit from these measures during the current year.
Performance by Segment
Amiad has two business units: Irrigation and Industry. Revenue
generated under the Company's distribution agreement with Netafim,
whereby Netafim sells Amiad's Irrigation products, contributes to
the Irrigation business unit sales. The Industry business unit
comprises sales into the Petrol, Petrochemical, Oil & Gas
("PPOG"), Municipal and General (other industry) segments.
Irrigation
Revenue in the Irrigation business unit increased to $33.4m in
the first half of 2019 (H1 2018: $31.7m), accounting for 57.2% of
the Company's revenue (H1 2018: 56.4%). This primarily reflects a
return to growth in sales generated under the Company's
distribution agreement with Netafim, which increased by 8.5%. There
was also overall growth in Amiad's direct Irrigation sales due to
an increase in the APAC region.
The new product series that Amiad launched last year, targeted
at the Irrigation market, consisting of the Mini Sigma, Sigma Pro
and ADI-P, performed well with good sales through the Company's
direct channels. During the period, the Company's distributors
finalised testing and validating the new products, and the Company
anticipates an increase in sales of the new products in the second
half of the year.
Industry
The Industry business unit revenue increased slightly to $25.0m
in the period (H1 2018: $24.5m), accounting for 42.8% of the
Company's revenue (H1 2018: 43.6%). The increase was primarily due
to growth in the Municipal segment within the Industry business
unit, where sales grew by 15.7% to $7.0m (H1 2018: $6.1m) due to
growth in the Americas and EMEA regions.
Sales in the PPOG segment within the Industry business unit grew
by 27.2% to $4.1m (H1 2018: $3.2m). This reflects growth in PPOG
sales in all of the Company's geographic regions.
For the Company's other projects within the Industry business
unit, which are classified within the 'General' industry segment,
sales were $13.9m (H1 2018: $15.2m) as growth in EMEA was offset by
reductions elsewhere.
Performance by Region
Americas
The Americas region includes sales by Amiad's subsidiaries in
the US, Mexico and Brazil as well as sales from the Company's
headquarters in Israel into Latin America. In the Americas, revenue
was $15.2m (H1 2018: $15.2m).
In the US, sales increased to $13.5m (H1 2018: $13.3m),
reflecting growth in the Industry business unit to $6.5m (H1 2018:
$6.2m) and a slight reduction in the Irrigation business unit to
$7.0m (H1 2018: $7.1m). The main contributor to growth in the US
was the Municipal segment, with sales increasing by 29.2% to $3.8m
(H1 2018: $2.9m). There was also growth in PPOG segment with a
64.7% increase in sale to $1.4m (H1 2018: $0.8m).
The Company expects significant growth in revenue in the US in
the second half of 2019 over the first half. In particular, the
Company anticipates a strong increase in sales in the PPOG segment,
primarily through sales of the TEQUATIC(TM) PLUS Filter.
EMEA
The EMEA region includes sales by Amiad's subsidiaries in France
(Amiad Europe), Turkey and the UK as well as the domestic sales of
the Company's headquarters in Israel and also into Europe, the
Middle East and Africa. Revenue in EMEA was 4.6% higher at $16.9m
(H1 2018: $16.1m) based on growth in the Industry business unit,
particularly in Amiad Europe.
Sales in the Industry business unit in EMEA increased to $8.7m
(H1 2018: $7.8m), reflecting growth in all of the industrial
segments. In particular, Amiad Europe achieved strong growth in the
Industry business unit. There was also increased sales in the
Industry business unit in Turkey due to growth in the Municipal
segment following a tentative return to public investment. In the
Irrigation business unit, sales were slightly lower at $8.2m (H1
2018: $8.3m).
APAC
The APAC region includes sales by Amiad's subsidiaries in
Australia, China, India and Singapore as well as sales from the
Company's headquarters in Israel into the Asia-Pacific geography.
Revenue in APAC increased to $14.0m (H1 2018: $13.6m), reflecting
growth in the Irrigation business unit to $4.9m (H1 2018: $3.6m)
while sales in the Industry unit were slightly lower at $9.1m (H1
2018: $10.0m).
Australia continued to be the largest contributor to regional
revenue, accounting for 54.8% of sales (H1 2018: 49.6%), with sales
increasing to $7.7m (H1 2018: $6.7m). This was based on good growth
in the Irrigation business unit, primarily due to two large
projects.
The Company continued to execute on its reorganisation at its
subsidiary in India. It is progressing as planned and the Company
expects to start receiving the benefits from this next year.
Financial Review
Revenue for the six months ended 30 June 2019 was $58.4m
compared with $56.2m for the first half of 2018.
Gross margin was 39.2% (H1 2018: 42.2%) with the reduction due
to the negative impact of a number of factors:
-- Impact on sales of currency fluctuations: primarily the
strengthening of the US Dollar against the Australian Dollar and
the Euro. This was the largest single factor, although partly
mitigated by the positive impact on costs of the strengthening of
the US Dollar against the New Israeli Shekel.
-- Sales mix: margin dilution arose from (i) two significant
projects in the PPOG segment that had a lower margin than average
Amiad sales; (ii) increased contribution to sales in H1 2019,
compared with H1 2018, from a lower-margin customer of Amiad Europe
in the Industry business unit; and (iii) the increased volumes with
Netafim.
-- Amiad benefited from a government grant in the first half of
2018, which wasn't repeated in H1 2019.
As a result of the lower gross margin, gross profit for the
period was $22.9m (H1 2018: $23.7m). The Company expects an
improvement in gross margin for full year 2019 as the large,
lower-than-average margin projects were completed in the first half
and there is expected to be an increase in sales of Amiad's new
Irrigation products, which carry a higher gross margin as well as a
higher total revenue without an expansion in the cost base.
Sales and marketing costs were $14.0m for the first half of 2019
(H1 2018: $14.2m). During the period, the Company reclassified
approximately $0.7m in 'cost of goods' items as 'sales and
marketing' costs to better reflect the nature of the expenses. The
reclassification has been applied retrospectively to the previous
year's figures, which was also in the amount of approximately
$0.7m, and these have been restated where applicable.
R&D costs were $1.8m (H1 2018: $1.9m) and administrative and
general expenses were $4.7m (H1 2018: $4.6m). As a result, total
operating expenses were reduced to $20.4m (H1 2018: $20.7m).
Operating profit was $2.5m (H1 2018: $3.1m), with the reduction
due to the lower gross margin, and profit before tax was $0.9m (H1
2018: $2.2m). The reduced profit before tax was due to the lower
operating profit as well as financial expenses of $1.2m from the
application of IFRS 16 as described below. Fully diluted earnings
per share were $0.026 (H1 2018: $0.056).
EBITDA increased to $5.5m for the period (H1 2018: $4.2m) due to
the adoption of IFRS 16 in the current year financials whereby the
lease operating cost was replaced with a lower depreciation charge
and an interest charge, which are not reflected in the EBITDA
measure. Excluding the impact of IFRS 16, EBITDA was broadly flat
year-on-year. Cash generated from operations increased to $3.9m (H1
2018: $1.0m), with approximately $2.0m of the increase due to less
cash being absorbed into working capital compared with the earlier
period. It was also positively impacted by the application of IFRS
16 due to the reallocation of lease charges from operating
activities to finance activities. The impact of IFRS 16 on EBITDA
and cash generation is described further below.
As at 30 June 2019, cash and cash equivalents were $14.1m (31
December 2018: $13.5m). Net debt at 30 June 2019 was $14.4m (31
December 2018: $13.8m), with the increase primarily due to an
expansion in working capital primarily as a result of a $4.3m
increase in trade receivables. This increase in trade receivables
was largely ($3.5m) due to increased volumes with Netafim. The
Company expects the net debt position to be reduced at
year-end.
IFRS 16
IFRS 16 is the new lease accounting standard that came into
effect on 1 January 2019. The most significant impacts of this new
accounting standard are the recognition of operating lease
liabilities on the balance sheet as a liability (lease liability)
and as an asset (right-of-use) and the operating lease charge being
replaced by a charge to depreciation and interest.
The overall impact of the adoption of IFRS 16 was to increase
EBITDA by $1.5m, operating profit by $0.25m and decrease net profit
by $0.87m. As a result of the initial application of IFRS 16, in
relation to the leases that were previously classified as operating
leases, the Company recognised $17.6m of right-of-use assets and
$17.6m lease liabilities as at 1 January 2019. As at 30 June 2019,
the Company recognised $21.5m right-of-use assets and $22.5m lease
liabilities on its balance sheet. The Company has elected not to
restate the 2018 comparatives in line with the transitional
exemptions available. As a result of IFRS 16, the Company has
recognised depreciation and interest costs instead of operating
lease expense. During the six months ended 30 June 2019, the
Company recognised $1.3m of depreciation charges and $0.4m of
interest costs instead of a $1.55m operating lease charge.
In addition, there was a $0.8m negative currency impact on
finance costs resulting from the revaluation of the operating
leases that are denominated in the New Israeli Shekel, which
strengthened against the Company's reporting currency of the US
Dollar. Financing expenses were therefore increased by $1.2m (being
the lease interest cost and currency impact), with net finance
costs being $1.5m (H1 2018: $0.9m), resulting in profit before tax
being reduced to $0.9m (H1 2018: $2.2m). See note 2 to the
consolidated financial statements for further detail.
Outlook
Amiad entered the second half of 2019 with a higher backlog than
at the same point of the prior year as well as a larger sales
pipeline, which the Company expects to convert to orders this year.
In particular, following the successful completion of the
evaluation of the Company's new Irrigation product range by its
distributors, Amiad expects a ramp up in sales of the new products
in the second half of the year. The Company continues to expect
significant growth in the US for the full year, with sales of the
TEQUATIC(TM) PLUS Filter anticipated to make an important
contribution.
As noted, the Company expects improvement in gross margin for
the full year, with an increase in revenue being achievable without
expanding the cost base as well as a change in sales mix. The
Company continues to focus on increasing efficiency, such as
through introducing further automation and value engineering.
As a result, the Company continues to anticipate good revenue
growth for full year 2019 over 2018 - with increased sales in both
the Irrigation and Industry business units - broadly in line with
market expectations and is targeting an improvement in gross margin
for the full year over the first half of 2019. However, the Company
remains cautious about the uncertainty regarding currency
fluctuations, particularly regarding the application of IFRS
16.
As previously announced, the Company is currently in discussions
with FIMI Opportunity Funds, a significant shareholder in the
Company, regarding a potential investment in Amiad through the
placing of new ordinary shares. While there is no guarantee that
the discussions will lead to an investment in the Company, the
Board is encouraged by the support demonstrated by its significant
shareholder and, were the investment to be completed, believes that
the proceeds would enable the Company to accelerate the achievement
of its growth objectives.
Consequently, with good growth expected for full year 2019, as
well as potential opportunities for accelerated growth, the Board
continues to look to the future with confidence.
AMIAD WATER SYSTEMS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
JUNE 30, 2019
June 30 December
31,
-----------------
2019 2018 2018
-------- ------- -----------
(Unaudited) (Audited)
----------------- -----------
U.S. dollars in thousands
------------------------------
Assets
CURRENT ASSETS:
Cash and cash equivalents 14,055 14,575 13,526
Financial assets at fair value through
profit or loss 262 162 158
Trade and other receivables:
Trade 41,212 36,203 37,154
Other 4,868 4,164 4,761
Current income tax assets 514 609 632
Inventories 29,240 30,070 30,975
-------- -------- --------
TOTAL CURRENT ASSETS 90,151 85,783 87,206
-------- -------- --------
NON-CURRENT ASSETS:
Investment in joint venture -,- 10 -,-
Severance pay fund, net 164 159 160
Long-term receivables 64 273 276
Property, plant and equipment 11,901 10,168 11,086
Intangible assets 13,058 13,927 13,267
Right of use assets 21,503 -,- -,-
Deferred income tax assets 2,536 2,634 2,687
======== ======== --------
TOTAL NON-CURRENT ASSETS 49,226 27,171 27,476
-------- -------- --------
TOTAL ASSETS 139,377 112,954 114,682
======== ======== ========
AMIAD WATER SYSTEMS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
JUNE 30, 2019
June 30 December
31,
-----------------
2019 2018 2018
-------- ------- -----------
(Unaudited) (Audited)
----------------- -----------
U.S. dollars in thousands
------------------------------
Liabilities and equity
CURRENT LIABILITIES:
Bank credit and current maturities
of borrowings from banks 18,790 10,956 17,365
Financial liabilities at fair value
through profit or
loss - derivatives 20 303 180
Trade and other payable:
Trade 16,101 14,132 14,414
Other 10,420 11,626 10,841
Operating Lease liabilities 3,843 -,- -,-
Current income tax liability 265 253 340
-------- -------- --------
TOTAL CURRENT LIABILITIES 49,439 37,270 43,140
-------- -------- --------
NON-CURRENT LIABILITIES:
Borrowings from banks (net of current
maturities) 9,623 14,442 9,914
Liability for royalty payment 1,058 1,066 1,008
Remeasurements of post-employment
benefit obligations, net 387 335 345
Operating Lease liabilities 18,608 - -
Deferred income tax liabilities 12 56 -
-------- -------- --------
TOTAL NON-CURRENT LIABILITIES 29,688 15,899 11,267
-------- -------- --------
TOTAL LIABILITIES 79,127 53,169 54,407
======== ======== ========
EQUITY:
Capital and reserves attributable
to equity
holders of the Company:
Share capital 2,801 2,798 2,800
Capital reserves 28,828 28,558 28,781
Transaction with non-controlling
interest (416) (259) (416)
Currency translation reverse (7,751) (6,344) (7,380)
Retained earnings 33,725 32,732 33,574
-------- -------- --------
57,187 57,485 57,359
NON-CONTROLLING INTERESTS 3,063 2,300 2,916
-------- -------- --------
TOTAL EQUITY 60,250 59,785 60,275
-------- -------- --------
TOTAL LIABILITIES AND EQUITY 139,377 112,954 114,682
======== ======== ========
AMIAD WATER SYSTEMS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)
FOR THE SIX-MONTH PERIODED JUNE 30, 2019
Six months ended Year ended
June 30 December 31,
-------------------
2019 2018 2018
--------- -------- -------------
(Unaudited) (Audited)
------------------- -------------
U.S dollars in thousands
except per share data
----------------------------------
Revenue 58,387 56,245 113,923
Cost of sales 35,507 *32,498 *65,936
-------- -------- --------
Gross Profit 22,880 23,747 47,987
Research and development, net 1,766 1,854 3,644
Selling and marketing costs 13,995 *14,222 *28,778
Administrative and general expenses 4,682 4,626 9,489
Other gains (42) (31) (64)
-------- -------- --------
Operating Profit 2,479 3,076 6,140
-------- -------- --------
Finance income 534 122 510
Finance costs (2,066) (1,028) (1,814)
-------- -------- --------
Finance income (costs), net (1,532) (906) (1,304)
-------- -------- --------
Profit (loss) before income taxes 947 2,170 4,836
Income tax expense 402 481 1,074
-------- -------- --------
Profit for the period 545 1,689 3,762
======== ======== ========
Other comprehensive income (loss)-
Items that will not be reclassified to
profit or loss:
Re-measurements of post-employment benefit
obligations -,- -,- 1
Items that may be subsequently reclassified
to profit or loss:
Currency translation differences (618) (1,582) (2,886)
-------- -------- --------
Other comprehensive loss for the period (618) (1,582) (2,887)
-------- -------- --------
Total comprehensive income (loss) for
the period (73) 107 875
======== ======== ========
Profit attributable to:
Equity holders of the Company 151 1,278 2,294
Non-controlling interests 394 411 1,468
-------- -------- --------
545 1,689 3,762
======== ======== ========
Total comprehensive income (loss) attributable
to:
Equity holders of the Company (220) 140 119
Non-controlling interest 147 (33) 756
-------- -------- --------
(73) 107 875
======== ======== ========
U.S dollars
------------------------------
Earnings per share attributable to the
equity
holders of the company during the period:
Basic 0.026 0.056 0.101
======== ======== ==========
Diluted 0.026 0.056 0.100
======== ======== ==========
*Restated for reclassification of certain expenses from 'cost of
sales' to 'selling and marketing'. No restatement has been made for
IFRS 16 in the 2018 comparative periods.
(Continued) - 1
AMIAD WATER SYSTEMS LTD.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX-MONTH PERIODED JUNE 30, 2019
Attributable to owners of the parent
----------------------------------------------------------------------
Transaction
with
Number Currency
of Share Capital translation non-controlling Retained Non-controlling Total
shares capital reserve reserve interest earning Total interest equity
----------- -------- -------- ------------ ---------------- --------- ------- ---------------- -------
U.S dollars in thousands
-------------------------------------------------------------------------------------------------
BALANCE AT JANUARY 1,
2019
(audited)
CHANGES DURING THE SIX
MONTHSED JUNE 30, 2019
(unaudited): 22,679,112 2,800 28,781 (7,380) (416) 33,574 57,359 2,916 60,275
Comprehensive
income:
Profit for
the period 151 151 394 545
Currency
translation
differences (371) (371) (247) (618)
------------ --------- ------- ---------------- -------
TOTAL COMPREHENSIVE
INCOME (371) 151 (220) 147 (73)
Transaction with
owners:
Recognition
of
compensation
related
employee
stock and
option
grants 48 48 48
Exercise of
options 8,563 1 (1) -,- -,-
TOTAL TRANSACTIONS
WITH OWNERS 8,563 1 47 48 48
----------- -------- -------- ------------ ---------------- --------- ------- ---------------- -------
BALANCE AT JUNE 30,
2019
(unaudited) 22,687,675 2,801 28,828 (7,751) (416) 33,725 57,187 3,063 60,250
=========== ======== ======== ============ ================ ========= ======= ================ =======
(Continued) - 2
AMIAD WATER SYSTEMS LTD.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX-MONTH PERIODED JUNE 30, 2019
Attributable to owners of the parent
-----------------------------------------------------------------------
Transaction
with
Number Currency non-controlling
of Share Capital translation Retained Non-controlling Total
shares capital reserve reserve interest earning Total interest equity
----------- -------- -------- ------------ ---------------- --------- -------- ---------------- --------
U.S dollars in thousands
---------------------------------------------------------------------------------------------------
BALANCE AT JANUARY 1, 2018
(audited) 22,663,651 2,798 28,547 (5,206) (259) 32,089 57,969 2,606 60,575
CHANGES DURING THE SIX
MONTHSED JUNE 30, 2018
(unaudited):
Comprehensive income:
Profit for the
period 1,278 1,278 411 1,689
Currency
translation
differences (1,138) (1,138) (444) (1,582)
------------ --------- -------- ---------------- --------
TOTAL COMPREHENSIVE INCOME (1,138) 1,278 140 (33) 107
Transaction with owners:
Recognition of
compensation
related employee
stock and
option grants 11 11 11
Dividend to a
non-controlling
interest (273) (273)
Dividend ($0.028
per share) (635) (635) (635)
-------- --------- -------- ---------------- --------
TOTAL TRANSACTIONS WITH
OWNERS 11 (635) (624) (273) (897)
----------- -------- -------- ------------ ---------------- --------- -------- ---------------- --------
BALANCE AT JUNE 30, 2018
(unaudited) 22,663,651 2,798 28,558 (6,344) (259) 32,732 57,485 2,300 59,785
=========== ======== ======== ============ ================ ========= ======== ================ ========
(Concluded) - 3
AMIAD WATER SYSTEMS LTD.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX-MONTH PERIODED JUNE 30, 2019
Attributable to owners of the parent
--------------------------------------------------------------------------------
Transaction
Currency with non- Non-
Number of Share Capital translation controlling Retained controlling Total
shares capital reserve reserve interest earning Total interest equity
----------- -------- -------- ------------ ------------ --------- -------- ------------ --------
U.S dollars in thousands
----------- -------------------------------------------------------------------------------------------
BALANCE AT JANUARY 1, 2018
(audited)
Comprehensive income
(loss): 22,663,651 2,798 28,720 (5,206) (259) 31,916 57,969 2,606 60,575
Profit (loss) for
the year 2,294 2,294 1,468 3,762
Currency
translation
differences (2,174) (2,174) (712) (2,886)
Remeasurement of
net defined
benefit liability (1) (1) (1)
------------ --------- -------- ------------ --------
TOTAL COMPREHENSIVE INCOME
(LOSS) (2,174) 2,293 119 756 875
TRANSACTION WITH OWNERS:
Recognition of
compensation
related to
Employee stock
and options grants 63 63 63
Exercise of options 15,461 2 (2) -,-
Acquisition of
non-controlling
interest (157) (157) (173) (330)
Dividend to
non-controlling
interest (273) (273)
Dividend ($0.028
per share) (635) (635) (635)
-------- ------------ --------- -------- ------------ --------
TOTAL TRANSACTION WITH
OWNERS 15,461 2 61 (157) (635) (729) (446) (1,175)
----------- -------- -------- ------------ ------------ --------- -------- ------------ --------
BALANCE AT DECEMBER 31, 2018 22,679,112 2,800 28,781 (7,380) (416) 33,574 57,359 2,916 60,275
=========== ======== ======== ============ ============ ========= ======== ============ ========
AMIAD WATER SYSTEMS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX-MONTH PERIODED JUNE 30, 2019
Six months ended Year ended
June 30 December 31,
-------------------
2019 2018 2018
--------- -------- -------------
(Unaudited) (Audited)
------------------- -------------
U.S dollars in thousands
------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash generated from operations (see note
1) 3,949 1,000 1,114
Interest paid (156) (523) (455)
Interest received 38 118 228
Income tax received (paid) (115) (552) (751)
--------- -------- ---------------
Net cash generated from operating activities 3,716 43 136
--------- -------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investment -,- -,- 40
Purchase of property, plant and equipment (2,160) (1,011) (3,223)
Purchase of intangible assets (379) (21) (63)
Investments grants received -,- 1,626 1,626
Restricted deposit (1) 80 212
Proceeds from sale of property, plant
and equipment 50 39 44
--------- -------- ---------------
Net cash used in investing activities (2,490) 713 (1,364)
--------- -------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Receipt of long-term borrowings 4,267 3,037 5,373
Dividends paid to equity holders of the
Company -,- (635) (635)
Dividends paid to non-controlling interest -,- (273) (273)
Acquisition of non-controlling interest -,- -,- (330)
Payments of lease liabilities (1,554) -,- -,-
Payments of long-term borrowings (3,786) (3,528) (7,505)
Increase in bank credit and short-term
borrowing, net 613 109 3,685
--------- -------- ---------------
Net cash generated used in financing activities (460) (1,290) 315
--------- -------- ---------------
EXCHANGE RATE GAIN (LOSS) ON CASH AND
CASH EQUIVALENTS (237) (1,013) (1,683)
--------- -------- ---------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 529 (1,547) (2,596)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 13,526 16,122 16,122
--------- -------- ---------------
CASH AND CASH EQUIVALENTS AT OF PERIOD 14,055 14,575 13,526
========= ======== ===============
AMIAD WATER SYSTEMS LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1) CASH FLOWS FROM OPERATIONS:
Six months ended Year ended
June 30 December
31,
-------------------
2019 2018 2018
--------- -------- -----------
(Unaudited) (Audited)
------------------- -----------
U.S. dollars in thousands
--------------------------------
Profit for the period 545 1,689 3,762
-------- -------- --------
(a) Adjustments to reconcile net income
to net cash
generated from operating activities:
Depreciation and amortization 3,065 1,082 2,864
Interest paid 156 523 455
Interest received (38) (118) (228)
Income taxes paid, net 115 552 751
Share-based payment, net 48 11 63
Increase in deferred income taxes, net 163 (139) (299)
Accrued severance pay, net 47 19 50
Exchange rate differences and interest
accrued on borrowings and other liabilities 1,208 265 237
Gain from sale of investment -,- -,- (30)
Loss (Profit) from sale of property,
plant and equipment (26) (25) (30)
Decrease (Increase) in assets at fair
value
through profit or loss (264) 271 152
-------- -------- --------
4,474 2,441 3,985
-------- -------- --------
Changes in working capital:
Decrease (increase) in accounts receivable:
Trade (4,328) 1,614 (245)
Other (113) (566) (1,435)
Decrease (increase) in long-term receivable 208 (225) (230)
Increase (Decrease) in accounts payable:
Trade 1,874 (1,029) (21)
Other (348) (800) (1,236)
Decrease (increase) in inventories 1,637 (2,124) (3,466)
-------- -------- --------
(1,070) (3,130) (6,633)
-------- -------- --------
Cash generated from operations 3,949 1,000 1,114
======== ======== ========
2) INITIAL IMPLEMENTATION OF NEW STANDARDS
IFRS 16 replaced the guidance in IAS 17, Leases ("IAS 17") upon
initial application. IFRS 16 sets out the principles for the
recognition, measurement, presentation and disclosure of leases,
and have material impact mainly on the accounting treatment applied
by the lessee in a lease transaction.
IFRS 16 changes the existing guidance in IAS 17 and requires
lessees to recognize a lease liability that reflects the discounted
value of future lease payments and a "right of use asset" in all
lease contracts (except for the following exemption), with no
distinction between financing and capital leases. However, IFRS 16
permits the lessee to elect not to apply these provisions for
short-term leases, according to groups of underlying assets, and
for leases where the underlying assets has a low value.
IFRS 16 also changes the definition of "a lease" and the manner
of assessing whether a contract contains a lease.
IFRS 16 requires a lessee to account for each lease component in
a contract separately from non-lease components. However, as a
practical expedient, IFRS 16 permits the lessee to choose,
according to groups of an underlying asset, not to separate
non-lease components from lease components, and instead to account
for all the lease components and associated non-lease components as
one lease.
For lessors, the guidance in IFRS 16 is similar to that in IAS
17, such that the lessors will continue to classify leases as
operating leases or financing leases, similar to the guidance in
IAS 17.
The Company applied IFRS 16 as from January 1, 2019.
For agreements in which the Group is the lessee, the Company
elected to apply the standard for the first time by recognizing
lease liabilities, for leases previously classified as operating
leases, based on the present value of the remaining lease payments,
discounted at the incremental interest rate of the lessee as at the
date of initial application. Concurrently, the Company recognized a
right-of-use asset at the same amount of the liability, adjusted
for any prepaid or accrued lease payments. Therefore, application
of the standard did not have an effect on the balance of retained
earnings as of January 1, 2019.
It should be noted that as part of the initial application of
the standard, the Company chose to apply the following practical
expedients:
- To apply this Standard to contracts that were previously
identified as leases applying IAS 17 Leases and IFRIC 4 Determining
whether an Arrangement contains a Lease and not to apply this
Standard to contracts that were not previously identified as
containing a lease applying IAS 17 and IFRIC 4
- To apply a single discount rate to a portfolio of leases with
reasonably similar characteristics.
- To rely on a previous assessment of whether a contract is
onerous in accordance with IAS 37 at the transition date, as an
alternative to assessing impairment of right-of-use assets.
- Not applying IFRS 16 with respect to leases that end within 12
months from the date of initial application and leases where the
underlying asset has a low value.
- Using hindsight when determining the lease term if the
contract includes an extension or termination option.
- Excluding initial direct costs from measurement of the
right-of-use asset at the date of initial application.
The impact of initial implementation the IFRS 16 on the
Company's statement of financial position as of January 1,
2019:
In accordance In accordance
with the Initial
new With the
policy implementation previous policy
-------------- --------------- ----------------
U.S. dollars in thousands
-------------------------------------------------
Non-current assets:
17,578 17,578 - Assets
current liabilities:
Current maturities of long-term
2,732 2,732 liabilities
non-current liabilities:
14,846 14,846 - Other liabilities
-------------- ---------------
17,578 17,578 -
============== ===============
The book value of right of use assets as of the reporting date
by groups of the underlying asset:
June 30, January 1, 2019
2019
-------------- ---------------------
U.S. dollars in thousands
-------------------------------------
Buildings 18,565 16,175
Vehicles and other 2,938 1,403
-------------- ---------------------
Total right of use assets 21,503 17,578
============== =====================
The table below represents the accumulated effect of the initial
implementation of IFRS 16 on the income statement for the six-month
period ended 30, June 2019.
In accordance In accordance
with the Initial
new With the
policy implementation previous policy
-------------- --------------- ----------------
U.S. dollars in thousands
-------------------------------------------------
2,479 250 2,229 Impact on Operating profit
1,532 1,198 334 Impact on Financing expenses
545 (868) 1,413 Impact on Net profit
The table below represents the accumulated effect of the initial
implementation of IFRS 16 on the cash flows for the six-month
period ended 30, June 2019.
In accordance In accordance
with the Initial
new With the
Policy implementation previous policy
-------------- --------------- ----------------
U.S. dollars in thousands
-------------------------------------------------
Cash flows from operating
3,716 1,554 2,162 activities
Cash flows from (used in)
(460) (1,554) 1,094 financing activities
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LFFLVAEIILIA
(END) Dow Jones Newswires
September 11, 2019 02:01 ET (06:01 GMT)
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