TIDMMTT
RNS Number : 3207Z
Metal-Tech Ltd
18 September 2009
18 September 2009
Metal-Tech Announces Half Year Results
Interim Results for the six months ended 30 June 2009
Metal-Tech Ltd., the metal-based hydrometallurgy and chemical company, which
focuses on the recycling and production of specialty metals powders such as
Tungsten and Molybdenum, is pleased to announce its results for the six months
ended 30 June 2009.
Financial Highlights:
* As expected, revenues decreased by 76% to US$20.4m (H1 2008: US$85.2m).
* Operating loss: US$6.9m (H1 2008: US$7.2 profit), as a direct result of an
unprecedented reduction of demand in end-use markets, lower metal prices and the
suspension of Molybdenum production in Mongolia
* Decrease in R&D expenses by 63% to US$0.3m (H1 2008: US$0.8m)
* Loss after tax US$7.7m (H1 2008: US$3.8m profit)
* Strong focus on cash management
* Continuation of inventory level reduction
* Reduction of level of bank debt since December 2008 by US$2m to US$28.3m at 30
June 2009
Operating Highlights:
* Low global market demand and price erosion
* The Company is actively engaged in cost reduction and measures to improve
efficiency at the plant in Israel
* Total management restructuring is now complete. This has increased activity in
developing sales while at the same time reduced operating costs
* Good progress is being maintained in R&D in strategic areas
* Significant technology development
Commenting on the results, Ariel Rosenberg, Chairman and Chief Executive
Officer of Metal-Tech, said:
As anticipated, Metal-Tech continues to be affected by the difficult global
economic climate and end markets in which its products are used.
Whilst the Company has taken a disciplined approach to cost control, there has
been an important shift towards investment in marketing systems, notably in our
Tungsten operations. We are making good progress in R&D, with efforts focused
towards supporting new business development initiatives, with an emphasis on
high return opportunities. We believe that Metal-Tech is responding
appropriately to the challenges it faces, and the steps taken by management will
put the Company in a good position to take advantage of market opportunities
both during the current conditions and the cyclical upturn in the future."
-Ends-
Enquiries:
Metal-Tech Ltd.
Ariel (Aik) Rosenberg, Chairman +972 544 215454
Panmure Gordon
Edward Farmer, Stuart Gledhill +44 20 7459 3600
Corfin Communications
Harry Chathli, Victoria Ward +44 20 7977 0020
Operational review
Further to the announcement of the full year results on 28 April 2009, the
Company experienced low demand during the first half of 2009, due to the impact
of the slowdown in global economic conditions on the end markets in which its
products are used. This resulted in revenues decreasing by 76% to US$20.4m in
the first half of 2009 (H1 2008: US$85.2m).
In American and European economies, demand from customers has all but ceased.
The Company also saw a reduction in metal prices during the period, with the
prices of both Tungsten and Molybdenum being affected. Additionally,
Metal-Tech's Mongolian plant is still not in operation and shall remain so until
a more favourable financial climate and conditions arise. The Company is in
negotiations with its Mongolian partner to secure suitable terms for the
resumption of supply in raw materials to the Company's Mongolian operations.
Against the backdrop of the economic climate, Metal-Tech has taken important
steps in managing its operational costs. The Company continues to be actively
engaged in cost reduction and measures to improve efficiency at the plant in
Israel while seeking to capture new business opportunities that arise as a
result of the continued turmoil in the sector. Management has prioritized budget
savings in all areas of the business, including through headcount reductions
and it has decreased investments in non-core business development
and strategically redirected controlled resources into marketing. Through this
shift in focus, the Company has notably improved the Tungsten marketing system.
While R&D expense was below the first half of 2008, the Company intends to
increase its investment in this area in the coming periods, as part of its
focused drive to develop, and leverage, additional proprietary technologies and
"know-how." R&D is being directed to support new business development
initiatives, with an emphasis on high return opportunities. This focus has lead
to an important increase in R&D investment in current South American projects
during H1 2009 and this will continue into the coming period. For example,
investment in the Codelco Project and the development of new hydrometallurgy
technologies for recovering Molybdenum and Tungsten from lower grade raw
materials.
During the second half of 2009, the Company will implement new technologies in
the expansion of its recycling capability and efficiency improvements in
production. This will enable Metal-Tech to increase its competitive edge and
financial strength.
Financial review
Revenues for the six months ending 30 June 2009 were US$20.4m, down from
US$85.2m during the same period of 2008, a decrease of 76%. Net loss was
US$7.7m, down from a profit of US$3.8m, a decrease of 55%. Gross loss was
US$3.5m, 17.1% of sales, vs. Gross profit of US$12.3m, 14.4% of sales
respectively.
During the period, cash and cash equivalents decreased from US$15.2m to
US$13.2m. Overall, working capital has decreased by 36% compared to 31
December 2008. Inventory decreased by US$11. 6m from US$47.9m at 31 December
2008 reflecting an effort to reduce existing inventory levels. Receivables
decreased from US$11.2m to US$4.6m, due to lower sales. The Company deems the
existing working capital invested in the business to be higher than necessary
and expects to reduce this level over the coming periods, freeing up cash for
other purposes. If sales return to previous levels then the Company will revisit
this issue and adjust the working capital requirements accordingly.
Metal-Tech continues to have constructive discussions with its bank who remains
supportive of the business. The Company has already reduced its debts by US$2m
since December 2008 to US$28.3m. .
General and Administrative expenses decreased from $3.7m in the six month period
ended 30 June 2008 to $2.4m in the six month period ended 30 June 2009. This
decrease was the result of several factors, including decreased investment in
new business development activity, streamlining, and a decrease in headcount.
Outlook
The Company expects to make operational improvements over the coming periods,
which are intended to increase capacity and improve the quality of its products.
Through this and by increasing R&D expenditure the Company continues to invest
in its future.
During the second half of 2009, the Company will implement new technologies in
the expansion of its recycling capability and efficiency improvements in
production at its Israeli plant. This will enable Metal-Tech to increase its
competitive edge and financial strength. The Company has seen some recent
stabilization in the markets in which it operates yet it is too early to predict
how this may develop. In the meantime, the Company is responding appropriately
to the challenges it faces, and the steps taken by management will put the
Company in a good position to take advantage of market opportunities both during
the current conditions and the cyclical upturn in the future.
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except shares and per share amounts)
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | Unaudited six | | Audited 12 |
| | | | months, | | months |
| | | | ended 30 June, | | ended |
| | | | | | 31 |
| | | | | | December, |
+---------------------------------------+-+-+----------------------------------+--+----------------+
| | | | 2009 | | 2008 | | 2008 |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Revenues | | | 20,434 | | 85,151 | | 138,333 |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Cost of revenues | | | 23,986 | | 72,833 | | 135,019 |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Gross profit (Loss) | | | (3,552) | | 12,318 | | 3,314 |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Research and development expenses, | | | 317 | | 851 | | 1,497 |
| net | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Selling and marketing expenses | | | 634 | | 535 | | 1,454 |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| General and administrative | | | 2,423 | | 3,749 | | 7,914 |
| expenses | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Total operating expenses | | | 3,374 | | 5,135 | | 10,865 |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Operating income (Loss) | | | (6,926) | | 7,183 | | (7,551) |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Financial expenses, net | | | 515 | | 2,617 | | 3,110 |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Other income (expense), net | | | 292 | | (79) | | 545 |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Share of income (losses) of | | | | | 499 | | 1,593 |
| joint ventures including | | | | | | | |
| impairment loss | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Profit (Loss) before tax | | | (7,149) | | 4,986 | | (8,523) |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Income tax expenses | | | 557 | | 1,211 | | 41 |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Profit (loss) for the period | | | (7,706) | | 3,775 | | (8,564) |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Attributable to: | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Equity holders of the | | | (6,925) | | 2,669 | | (9,125) |
| Company | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Minority interest | | | (781) | | 1,106 | | 561 |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | (7,706) | | 3,775 | | (8,564) |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Basic and diluted earnings (loss) | | | (0.20) | | 0.1 | | |
| per share attributable to Ordinary | | | | | | | |
| equity holders of the Company | | | | | | | (0.24) |
| Basic and diluted earnings per | | | | | | | |
| share | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| Weighted average number of shares | | | 38,376,923 | | 38,376,923 | | |
| used in computing basic and | | | | | | | |
| diluted net earnings (loss) per | | | | | | | |
| share attributable to Ordinary | | | | | | | 38,376,923 |
| equity holders of the Company | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
| | | | | | | | |
+---------------------------------------+-+-+---------------+--+---------------+--+----------------+
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| | Note | | Unaudited | | Audited |
| | | | 30 June, | | 31 |
| | | | | | December, |
+---------------------------------+---------+-+---------------------------+--+--------------+
| | | | 2009 | | 2008 | | 2008 |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| ASSETS | | | | | | | |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| | | | | | | | |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| CURRENT ASSETS: | | | | | | | |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| Cash and cash | | | 8,982 | | 9,177 | | 12,012 |
| equivalents | | | | | | | |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| Restricted cash | | | 4,211 | | 6,561 | | 3,150 |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| Available for sale | | | 38 | | 82 | | 28 |
| marketable | | | | | | | |
| securities | | | | | | | |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| Trade receivables | | | 4,571 | | 22,373 | | 11,153 |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| Other accounts | | | 2,230 | | 4,502 | | 5,343 |
| receivable | | | | | | | |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| Inventories | | | 36,347 | | 57,644 | | 47,902 |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| Total current assets | | | 56,379 | | 100,339 | | 79,588 |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| | | | | | | | |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| | | | | | | | |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| NON-CURRENT ASSETS | | | | | | | |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| Investment in joint ventures | | | | | 4,842 | | 0 |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| Deferred finance costs | | | 413 | | 453 | | 377 |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| Deferred taxes | | | 374 | | 375 | | |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| Long term deposits | | | | | | | |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| Property, plant and | | | 29,307 | | 28,170 | | 29,616 |
| equipment, net | | | | | | | |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| Total non-current assets | | | 30,094 | | 33,840 | | 29,993 |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| | | | | | | | |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
| TOTAL ASSETS | | | 86,473 | | 134,179 | | 109,581 |
+---------------------------------+---------+-+-----------+--+------------+--+--------------+
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share data)
+---------------------------------------+-+-+-----------+--+------------+--+-------------+-+
| | | | Unaudited | | Audited |
| | | | 30 June, | | 31 |
| | | | | | December, |
+---------------------------------------+-+-+---------------------------+--+---------------+
| | | | 2009 | | 2008 | | 2008 |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| LIABILITIES AND | | | | | | | |
| SHAREHOLDERS' | | | | | | | |
| EQUITY | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| CURRENT LIABILITIES: | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Short-term bank credit | | | 6,765 | | 11,337 | | 10,562 |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Short-term loans | | | 13,515 | | 19,608 | | 16,923 |
| and current | | | | | | | |
| maturities | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Trade payables | | | 7,614 | | 23,616 | | 17,435 |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Income taxes | | | 5,972 | | 7,695 | | 6,317 |
| payable | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Other accounts payable | | | 4,853 | | 6,144 | | 5,834 |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Total current liabilities | | | 38,719 | | 68,400 | | 57,071 |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| LONG-TERM LIABILITIES: | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Long-term loans | | | 8,041 | | 6,488 | | 6,220 |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Deferred tax | | | 1,070 | | 461 | | 79 |
| liabilities | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Severance pay | | | 211 | | 213 | | 241 |
| liability | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Total non-current liabilities | | | 9,322 | | 7,162 | | 6,540 |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| EQUITY: | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Ordinary shares | | | 2,399 | | 2,399 | | 2,399 |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Share premium | | | 23,892 | | 23,892 | | 23,892 |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Capital reserve | | | 789 | | 339 | | 624 |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Capital note | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Retained earnings | | | 9,117 | | 27,845 | | 16,051 |
| (accumulated deficit) | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| | | | 36,197 | | 54,473 | | 42,966 |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| MINORITY INTEREST | | | 2,235 | | 4,144 | | 3,004 |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Total Equity | | | 38,432 | | 58,617 | | 45,970 |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| Total Liabilities and Equity | | | 86,473 | | 134,179 | | 109,581 |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+
| | | | | | | | |
+---------------------------------------+-+-+-----------+--+------------+--+-------------+-+
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+--+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | Share | | Share | | Capital | | Capital | | Retained | | |
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | capital | | premium | | reserve | | note | | earnings | | Total |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| Balance at 1 January , | | 2,399 | | 23,892 | | 425 | | - | | 25,176 | | 51,892 |
| 2008 (audited) | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| Cost of share | | | | | | 114 | | | | | | 114 |
| based payment | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| Net gain on | | | | | | 85 | | | | | | 85 |
| cash flow | | | | | | | | | | | | |
| hedges | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| loss | | - | | - | | - | | - | | (9,125) | | (9,125) | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+--+
| Balance at 31 December , | | 2,399 | | 23,892 | | 624 | | | | 16,051 | | 42,966 |
| 2008 (audited) | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| Balance as of 1 January, | | 2,399 | | 23,892 | | 425 | | - | | 25,176 | | 51,892 |
| 2008 (audited) | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| Cost of share | | - | | - | | 129 | | - | | - | | 129 |
| based payment | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| Net loss on | | - | | - | | (215) | | - | | - | | (215) |
| cash flow | | | | | | | | | | | | |
| hedges | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| Loss | | - | | - | | | | - | | 2,669 | | 2,669 |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| Balance at 30 June, 2008 | | 2,399 | | 23,892 | | 339 | | | | 27,845 | | 54,473 |
| (unaudited) | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| Balance as of 1 January, | | 2,399 | | 23,892 | | 624 | | | | 16,051 | | 42,966 |
| 2009 (audited) | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| Cost of share | | | | | | 165 | | | | | | 165 |
| based payment | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| Loss | | | | | | | | | | (6,925) | | (6,925) |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| Balance at 30 June, 2009 | | 2,399 | | 23,892 | | 789 | | - | | 9,117 | | 36,197 |
| (unaudited) | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---------------------------+-+------------+-+-----------+-+------------+-+------------+--+-------------+--+------------+--+
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
+------------------------------------------------+-+------------+--+------------+--+--------------+
| | | Unaudited | | Audited |
| | | six months ended | | 12 |
| | | 30 June, | | months |
| | | | | ended |
| | | | | 31 |
| | | | | December, |
+------------------------------------------------+-+----------------------------+--+--------------+
| | | 2009 | | 2008 | | 2008 |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Cash flows from operating | | | | | | |
| activities: | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Profit (loss) for the year | | (7,706) | | 3,775 | | (8,564) |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Adjustments required to | | 12,250 | | 719 | | 14,176 |
| reconcile net income to | | | | | | |
| net cash provided by (used | | | | | | |
| in) operating activities | | | | | | |
| (a) | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Net cash flow provided by (used in) | | 4,544 | | 4,494 | | 5,612 |
| operating activities | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Cash flows from investing | | | | | | |
| activities: | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Purchase of property, | | (1,017) | | (3,609) | | (6,116) |
| plant and equipment | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Proceeds from sale | | | | 70 | | 411 |
| of property, plant | | | | | | |
| and equipment | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Decrease (increase) in | | (1,061) | | | | 3,411 |
| restricted cash | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Proceeds from disposal of JV | | | | | | 5,737 |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Net cash used in investing | | (2,078) | | (3,539) | | 3,443 |
| activities | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Cash flows from financing | | | | | | |
| activities: | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Dividend paid | | (112) | | | | (731) |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Dividend paid to minority | | | | | | (584) |
| interest | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Proceeds from short and | | | | 3,159 | | 10,267 |
| long-term loans | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Repayment of short | | (4,950) | | (832) | | (11,116) |
| and long-term | | | | | | |
| loans | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Decrease (increase) in | | (434) | | (44) | | (818) |
| short-term bank credit, | | | | | | |
| net | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Net cash provided by financing | | (5,496) | | 2,283 | | (2,982) |
| activities | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Increase (decrease) in cash and | | (3,030) | | 3,238 | | 6,073 |
| cash equivalents | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Cash and cash equivalents at the | | 12,012 | | 5,939 | | 5,939 |
| beginning of the year | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| Cash and cash equivalents at the | | 8,982 | | 9,177 | | 12,012 |
| end of the period | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
| | | | | | | |
+------------------------------------------------+-+------------+--+------------+--+--------------+
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
+--------+-----------------------------------+------+------+------+------------+--+------+------+------+-------+------+------+
| | | Unaudited | | Audited |
| | | 30 June, | | 31 |
| | | | | December, |
+--------------------------------------------+-------------+-----------------------------+-------------+--------------+
| | | 2009 | | 2008 | | 2008 |
+---------------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| (a) | Adjustments | | | | | | |
| | required to | | | | | | |
| | reconcile | | | | | | |
| | net income | | | | | | |
| | to net cash | | | | | | |
| | provided by | | | | | | |
| | (used in) | | | | | | |
| | operating | | | | | | |
| | activities: | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Income | | | | | | |
| | and | | | | | | |
| | expenses | | | | | | |
| | not | | | | | | |
| | involving | | | | | | |
| | cash | | | | | | |
| | flows: | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Depreciation | | 1,284 | | 1,304 | | 2,306 |
| | | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Amortization | | 76 | | 152 | | 151 |
| | of deferred | | | | | | |
| | finance | | | | | | |
| | costs | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Share | | | | (564) | | (1,593) |
| | of | | | | | | |
| | (income) | | | | | | |
| | losses | | | | | | |
| | of joint | | | | | | |
| | ventures | | | | | | |
| | including | | | | | | |
| | impairment | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Gain | | | | | | (604) |
| | on | | | | | | |
| | sale | | | | | | |
| | of | | | | | | |
| | equity | | | | | | |
| | interest | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Unrealized | | | | | | 67 |
| | gains | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Severance | | (30) | | (264) | | (236) |
| | pay | | | | | | |
| | liability | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Accrued | | | | 203 | | 426 |
| | interest | | | | | | |
| | and | | | | | | |
| | foreign | | | | | | |
| | exchange | | | | | | |
| | differences | | | | | | |
| | on short | | | | | | |
| | and | | | | | | |
| | long-term | | | | | | |
| | liabilities, | | | | | | |
| | net | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Capital | | 41 | | 87 | | (195) |
| | losses | | | | | | |
| | (gains) | | | | | | |
| | on | | | | | | |
| | sales | | | | | | |
| | of | | | | | | |
| | fixed | | | | | | |
| | assets | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Cost | | 165 | | (129) | | 114 |
| | of | | | | | | |
| | share | | | | | | |
| | based | | | | | | |
| | payments | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Securities | | (10) | | 13 | | |
| | revaluation | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Deferred | | 619 | | 48 | | 41 |
| | taxes | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | | | | | 11 | | (94) |
| | Other | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | | | 2,145 | | 861 | | 383 |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Changes | | | | | | |
| | in | | | | | | |
| | operating | | | | | | |
| | assets | | | | | | |
| | and | | | | | | |
| | liabilities: | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Decrease | | | | | | 7 |
| | in | | | | | | |
| | related | | | | | | |
| | parties, | | | | | | |
| | net | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Decrease | | 6,581 | | (11,830) | | (610) |
| | (increase) | | | | | | |
| | in trade | | | | | | |
| | receivables, | | | | | | |
| | net | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Decrease | | 1,644 | | 5,299 | | 4,646 |
| | (increase) | | | | | | |
| | in other | | | | | | |
| | accounts | | | | | | |
| | receivable | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Decrease | | 11,555 | | 11,883 | | 21,625 |
| | (increase) | | | | | | |
| | in | | | | | | |
| | inventory | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Increase | | (9,821) | | (6,380) | | (8,609) |
| | (decrease) | | | | | | |
| | in trade | | | | | | |
| | payables | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | Increase | | 146 | | 886 | | (3,266) |
| | (decrease) | | | | | | |
| | in other | | | | | | |
| | accounts | | | | | | |
| | payable | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | | | 10,105 | | (142) | | 13,793 |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | | | 12,250 | | 719 | | 14,176 |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | | | | | | | |
+--------+------------------------------------------+-------------+------------+--+-------------+--------------+-------------+
| | | | | | | | |
+--------+-----------------------------------+------+------+------+------------+--+------+------+------+-------+------+------+
The accompanying notes are an integral part of the consolidated financial
statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - GENERAL:
The interim financial statement as of 30 June 2009 and for the six month period
then ended (hereafter - the interim statements) were prepared in condensed form
in accordance with IAS 34 - "Interim Financial Reporting".
The accounting policies applied in preparation of the interim financial
statements are consistent with those used in the 2008 annual financial
statements but have not been audited by the auditors. Nevertheless, the interim
statements do not include all the information and explanations required for
annual financial statements, and should be read in conjunction with the 2008
annual financial statements.
Costs incurred unevenly during the year are brought forward or deferred, for
interim reporting purposes if, and only if, such costs may be brought forward or
deferred in the annual reporting.
Taxes on income for the interim periods are included based on the best estimate
of the anticipated average annual tax expense for the entire year; changes in
said estimate, as well as changes in the amount of the tax saving to be utilized
in the following years, are included as an expense for the current quarter.
NOTE 2 - REVENUES BY GEOGRAPHICAL SECTOR
Revenues classified by geographical destinations based on the customer location:
+-------------------------+-+------------+--+------------+-+-----------+-----------+-----------+
| | | Unaudited six | | Audited 12 months |
| | | months, | | ended |
| | | Ended 30 June, | | 31 December, |
+-------------------------+-+----------------------------+-+-----------------------+
| | | 2009 | | 2008 | | 2008 |
+-------------------------+-+------------+--+------------+-+-----------------------+
| | | USD'000 | | USD'000 | | USD'000 |
+-------------------------+-+------------+--+------------+-+-----------------------+
| | | | | | | |
+-------------------------+-+------------+--+------------+-------------+-----------------------+
| United | | 6,583 | | 18,548 | | 33,386 |
| States | | | | | | |
+-------------------------+-+------------+--+------------+-------------+-----------------------+
| China | | 1,189 | | 2,432 | | 4,768 |
+-------------------------+-+------------+--+------------+-------------+-----------------------+
| Japan | | 1,445 | | 15,937 | | 26,525 |
+-------------------------+-+------------+--+------------+-------------+-----------------------+
| Korea | | 1,030 | | 18,986 | | 26,253 |
+-------------------------+-+------------+--+------------+-------------+-----------------------+
| Europe | | 5,881 | | 20,961 | | 34,255 |
+-------------------------+-+------------+--+------------+-------------+-----------------------+
| South Africa | | 1,914 | | | | 5,015 |
+-------------------------+-+------------+--+------------+-------------+-----------------------+
| India | | | | | | 5,970 |
+-------------------------+-+------------+--+------------+-------------+-----------------------+
| Israel | | 37 | | 274 | | 454 |
+-------------------------+-+------------+--+------------+-------------+-----------------------+
| Others | | 2,355 | | 8,013 | | 1,707 |
+-------------------------+-+------------+--+------------+-------------+-----------------------+
| | | | | | | |
+-------------------------+-+------------+--+------------+-------------+-----------------------+
| | | 20,434 | | 85,151 | | 138,333 |
+-------------------------+-+------------+--+------------+-+-----------+-----------+-----------+
NOTE 3 - Investment in joint ventures:
BIT Metals -
On August 1, 2008, the company sold its investment in an associated company BIT
Metals, to a third party for consideration. As a result, BIT Metals repaid its
obligations to the Company, in the amount of $3,000,000, in addition to accrued
interest. The final sale price will be determined based on the audited financial
statements of BIT Metals for the period ending December 31, 2008.
+-----------------------+----------+--------------+----------+--------------+
| | | Unaudited | | Audited |
| | | six | | 12 |
| | | months, | | months |
| | | Ended 30 | | ended |
| | | June, | | 31 |
| | | | | December, |
+-----------------------+----------+--------------+----------+--------------+
| | | 2008 | | 2007 |
+-----------------------+----------+--------------+----------+--------------+
| | | USD'000 | | USD'000 |
+-----------------------+----------+--------------+----------+--------------+
| | | | | |
+-----------------------+----------+--------------+----------+--------------+
| Carrying | | 4,842 | | 4,027 |
| amount | | | | |
| of the | | | | |
| investment | | | | |
+-----------------------+----------+--------------+----------+--------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EADNPFASNEFE
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