TIDMMTT
RNS Number : 0181S
Metal-Tech Ltd
02 September 2010
2 September 2010
Metal-Tech Ltd.
("Metal-Tech" or "the Company")
Results for the six months ended 30 June 2010
Metal-Tech, the producer and recycler of speciality metals such as Tungsten and
Molybdenum, announces results for the six months ended 30 June 2010.
Financial Summary:
· Revenue increased to US$21.3m (H1 2009: US$20.4m), despite sales only
coming from Tungsten products
· Net loss reduced to US$5.4m (H1 2009 US$7.7m)
· Loss per share of US$0.14 (H1 2009: US$0.18 loss)
· Operating expenses reduced 20% to US$2.7m (H1 2009: US$3.4m)
· Bank debt reduced to US$26.2m at 30 June 2010 from US$27.9m at 30 June 2009
· Cash generated from operations in H1 2010 of approximately US$0.7m (H1
2009: US$4.5m)
· Cash, cash deposits and restricted cash balance at 30 June 2010 were
US$8.2m (30 June 2009: US$13.2m)
Operational Summary:
· Tungsten sales increased 83% to US$21.3m (H1 2009: US$11.6m) as demand
increased and the Company focused its efforts on major international markets
· Increased market share and expanded customer portfolio with the addition of
three significant new customers
· Increased recycling and production capacity in Israel to match the enlarged
market demand at lower operating costs
· Recently agreed on the key principles for cooperation with an Asian
producer with the intention of developing a co-production arrangement using the
Company's surplus plant and machinery by year-end
· Testing of a pilot scale facility to recover valuable metals from mining
waste, which utilises the Company's in-house hydrometallurgical technology, in
association with a leading mining company, which continues on schedule in Israel
· Discussions with our partners in Mongolia to restore Molybdenum raw
material supplies at an economic cost continue at a slow pace
· In January 2010, the Company filed a Request for Arbitration against the
Republic of Uzbekistan related to that country's unlawful treatment of
Metal-Tech's 50 per cent. investment in UzMetal-Technology
Outlook for H2 2010:
· Increased demand for Tungsten expected to continue with a significantly
higher pipeline of orders for H2 2010, as key global end-user industries
(automotive, drilling, cutting tools, aviation etc) recover
· Tight cost control will be maintained throughout the Company's activities
· Recycling opportunities including novel processing of spent oil refinery
catalysts (which contain economic amounts of Tungsten and Molybdenum) will be
expanded
Commenting on the results, Aik Rosenberg, Executive Chairman and CEO of the
Company, said: "In spite of market conditions continuing to be difficult,
Metal-Tech has delivered a creditable first half's performance in 2010,
increasing revenues and reducing losses despite sales coming only from Tungsten.
We have reduced our debt to the banks and achieved a positive cash flow from
operating activities.
"Looking ahead, I expect trading to continue to improve in the second half with
increased demand for Tungsten from both established and new customers. With a
strong order book in place, I expect sales to grow further in the second half
and to be significantly higher in the full year than in 2009. As a result, the
Board anticipates that 2010 performance will be a positive step in the recovery
of Metal-Tech."
Enquiries:
+------------------------------------+-----------------------+
| Metal-Tech Ltd. | +972 544 215454 |
+------------------------------------+-----------------------+
| Ariel (Aik) Rosenberg | |
+------------------------------------+-----------------------+
| | |
+------------------------------------+-----------------------+
| Panmure Gordon | +44 20 7459 3600 |
+------------------------------------+-----------------------+
| Edward Farmer, Stuart Gledhill | |
+------------------------------------+-----------------------+
| | |
+------------------------------------+-----------------------+
| Corfin Public Relations | +44 20 7596 2860 |
+------------------------------------+-----------------------+
| Harry Chathli, Alexis Gore | |
+------------------------------------+-----------------------+
Operating Review
Metal-Tech is pleased to report a stronger performance in the first half of 2010
following the challenging trading conditions throughout 2009. Despite no sales
of Molybdenum, total revenue increased by 5% to US$21.3m (H1 2009: US$20.4m),
contributing to a reduced loss of US$5.4m (H1 2009: US$7.7m).
The revenue increase reflected a significant improvement in sales of Tungsten,
which increased 83% compared to the same period last year as a result of firming
of price and increase in tonnage. The Company increased its market share and
secured three significant new customers in Europe and North America. This was
the result of an aggressive sales approach and improved marketing system to take
advantage of improving demand in end- markets such as automotive, drilling,
aviation, cutting tools, construction and engineering, in which Metal-Tech's
customers' products are used.
As anticipated, there were no sales of Molybdenum in the first half of the year
and the Company does not expect any sales throughout 2010. As stated below,
progress is ongoing to resolve operational issues throughout its Molybdenum
businesses, especially in Mongolia and Uzbekistan.
In the first half the Company did not have sufficient capacity to fulfil
customer demand for Tungsten. Accordingly, the Company has begun to install
additional production equipment in its plant in Israel and is seeking other
international opportunities for co-production. Metal-Tech recently agreed on the
key principles for cooperation with an Asian producer with the intention of
developing a co-production arrangement using the Company's surplus plant and
machinery by year-end.
Focus on R&D
Spending on R&D continued in the first half to be directed to new business
development initiatives capable of yielding attractive returns in the short to
medium terms.
As stated previously, the Company is pursuing a joint technical investigation
with a leading mining company to demonstrate the continuous performance
characteristics of the Company's proprietary pressure leaching technology at its
semi industrial pilot plant facility at Ramat Hovav in Israel. This plant is
performing as expected and the project is progressing on schedule.
Update on Mongolian Operations
The Company remains in protracted negotiations with its Mongolian partner to
secure suitable terms for the resumption of supply of raw materials to the
Company's Mongolian operations which produce Molybdenum. Although Shim
Technology is in arrears on repayment of the $6.0 million bank debt, the
Mongolian partner is the guarantor of this loan and there is no claim against
Metal-Tech, whose liability is limited to $0.5m. The key lending institution
has offered to reschedule this loan.
Update on Uzbekistan Action
As announced in January 2010, Metal-Tech filed a Request for Arbitration against
the Republic of Uzbekistan related to that country's unlawful treatment of
Metal-Tech's 50 percent investment in UzMetal-Technology, a joint venture to
produce high-quality molybdenum products. The Request for Arbitration, filed
with the International Centre for Settlement of Investment Disputes (ICSID)
based in Washington, D.C., asserted Uzbekistan's breach of the Israel-Uzbekistan
Bilateral Investment Treaty, as well as violations of various standards of
treatment under international law and Uzbek legislation.
The current position is that a three strong tribunal comprising a nominee of the
Republic of Uzbekistan, a nominee of the Company and an independent nominee as
the Chair, has been appointed. An initial session of the tribunal has been held,
but the process is expected to take up to 18 months to complete.
Financial Review
Revenues for the six months ending 30 June 2010 were US$21.3m, an increase from
US$20.4m in H1 2009. Loss attributed to equity holders was US$5.4m, down from a
loss of US$6.9m in H1 2009. Gross loss was US$2.1m (H1 2009: Gross loss:
US$3.6m)
Throughout the first half the Company continued to reduce operating expenses
across all business functions. The Company maintained its focus on cash
generation including the reduction of inventory levels. Inventory decreased by
US$4.1 m from US$26.5m at 31 December 2009.
General and Administrative expenses decreased to US$1.7m in the first half of
2010 compared with US$2.4m in equivalent period in 2009. This decrease was the
result of several factors, including decreased investment in new business
development activity, streamlining business processes, and a substantial
reduction in headcount.
The Company is committed to reduce its debt levels with a reduction of bank debt
by 7% from US$21.3 m at 30 June 2009 to US$19.9 m at 30 June 2010.
At 30 June 2010, the cash, cash equivalents and restricted cash balance of the
Company was US$8.2m compared to US$9.9m at 31 December 2009 and US$13.2m at 30
June 2009. The Company believes this is sufficient to meet Metal-Tech's current
financing costs and expected operating expenses. The Company will continue to
prudently manage its affairs in order to maintain sufficient operating cash
flow.
Outlook
The strong trading shown by sales in the first half in Tungsten is continuing
into the second half of 2010 with the Company having a robust order pipeline.
Tungsten prices have appreciated by about 16% since 30 June 2009 and the benefit
of this is likely to be seen in the second half revenue. This, together with the
on-going focus on cost reduction, should lead to some margin improvement.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+-----+-----+
| | | | | | | | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| | | Unaudited | | Audited | |
| | | June 30, | | December 31, | |
+----------------------------------+-----+-----------------------------------------------+-----+--------------------------+-----+
| | | 2010 | | 2009 | | 2009 | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| ASSETS | | | | | | | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| | | | | | | | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| CURRENT ASSETS: | | | | | | | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| Cash and cash equivalents | | 4,655 | | 8,982 | | 5,879 | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| Restricted cash | | 3,493 | | 4,211 | | 3,992 | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| Available for sale investments | | - | | 38 | | 86 | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| Trade receivables | | 10,110 | | 4,571 | | 9,752 | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| Other accounts receivable | | 3,475 | | 2,230 | | 1,067 | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| Inventories | | 22,398 | | 36,347 | | 26,544 | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| | | | | | | | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| | | 44,131 | | 56,379 | | 47,320 | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| | | | | | | | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| NON-CURRENT ASSETS: | | | | | | | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| | | | | | | | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| Investment in joint ventures | | - | | - | | - | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| Deferred finance costs | | - | | 413 | | - | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| Deferred taxes | | - | | 374 | | - | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| Property, plant and equipment | | 25,795 | | 29,307 | | 26,232 | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| | | | | | | | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| | | 25,795 | | 30,094 | | 26,232 | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| | | | | | | | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| Total assets | | 69,926 | | 86,473 | | 73,552 | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| | | | | | | | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+
| | | | |
| | | | |
| | | | |
| The accompanying notes are an integral part of the consolidated | | | |
| financial statements. | | | |
+----------------------------------+-----+---------------------+-----+-------------------+-----+--------------------------+-----+-----+-----+
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share data)
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+-----+-----+
| | | Unaudited | | Audited |
| | | June 30, | | December 31, |
+----------------------------------------+-----+--------------------------------------------+-----+--------------------------+
| | | 2010 | | 2009 | | 2009 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| LIABILITIES AND EQUITY | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| CURRENT LIABILITIES: | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Short-term bank credit | | 3,609 | | 6,765 | | 5,915 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Short-term loans and current | | 17,960 | | 13,515 | | 20,174 |
| maturities | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Trade payables | | 11,331 | | 7,614 | | 8,342 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Income taxes payable | | 6,700 | | 5,972 | | 6,981 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Other accounts payable | | 4,561 | | 4,853 | | 4,385 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | 44,161 | | 38,719 | | 45,797 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| NON-CURRENT LIABILITIES: | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Long-term loans | | 5,081 | | 8,041 | | 1,863 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Employee benefit obligations | | 453 | | 211 | | 305 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Deferred tax liabilities | | - | | 1,070 | | - |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | 5,534 | | 9,322 | | 2,168 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Total liabilities | | 49,695 | | 48,041 | | 47,965 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| EQUITY: | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Equity attributable to the equity | | | | | | |
| holders of the Company: | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Issued capital | | 2,399 | | 2,399 | | 2,399 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Share premium | | 23,892 | | 23,892 | | 23,892 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Other reserves | | 758 | | 789 | | 714 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Retained earnings (accumulated | | (6,818) | | 9,117 | | (1,418) |
| deficit) | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | 20,231 | | 36,197 | | 25,587 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Minority interests | | - | | 2,235 | | - |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Total equity | | 20,231 | | 38,432 | | 25,587 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| Total liabilities and equity | | 69,926 | | 86,473 | | 73,552 |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | | | | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+
| | | |
| | | |
| The accompanying notes are an integral part of the consolidated financial | | |
| statements. | | |
+----------------------------------------+-----+-------------------+-----+------------------+-----+--------------------------+-----+-----+
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
U.S. dollars in thousands (except share and per share data)
+----------------+--------+------------+--------+------------+--------+------------+--------+--------+
| | | Unaudited six months, | | Audited | |
| | | ended June 30, | | year | |
| | | | | ended | |
| | | | | December | |
| | | | | 31, | |
+----------------+--------+----------------------------------+--------+------------+-----------------+
| | | 2010 | | 2009 | | 2009 | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Revenues | | 21,317 | | 20,434 | | 36,742 | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Cost | | 23,491 | | 23,986 | | 45,164 | |
| of | | | | | | | |
| sales | | | | | | | |
| before | | | | | | | |
| write-down | | | | | | | |
| of | | | | | | | |
| inventories | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Gross | | (2,174) | | (3,552) | | (8,422) | |
| profit | | | | | | | |
| (loss) | | | | | | | |
| before | | | | | | | |
| write-down | | | | | | | |
| of | | | | | | | |
| inventories | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Write-down | | - | | - | | 1,497 | |
| of | | | | | | | |
| inventories | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Gross | | (2,174) | | (3,552) | | (9,919) | |
| profit | | | | | | | |
| (loss) | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Research | | 415 | | 317 | | 655 | |
| and | | | | | | | |
| development | | | | | | | |
| expenses | | | | | | | |
| ,net | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Selling | | 636 | | 634 | | 1,230 | |
| and | | | | | | | |
| marketing | | | | | | | |
| expenses | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| General | | 1,671 | | 2,423 | | 4,562 | |
| and | | | | | | | |
| administrative | | | | | | | |
| expenses | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Impairment | | - | | - | | 2,227 | |
| loss on | | | | | | | |
| property, | | | | | | | |
| plant and | | | | | | | |
| equipment | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Total | | 2,722 | | 3,374 | | 8,674 | |
| operating | | | | | | | |
| expenses | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Operating | | (4,896) | | (6,926) | | (18,593) | |
| loss | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Finance | | (969) | | (524) | | (2,455) | |
| (costs) | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Finance | | 471 | | - | | 426 | |
| income | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Other | | (6) | | 292 | | (16) | |
| income | | | | | | | |
| (expense), | | | | | | | |
| net | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Loss | | (5,400) | | (7,158) | | (20,638) | |
| before | | | | | | | |
| tax | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Income | | - | | (557) | | 165 | |
| tax | | | | | | | |
| benefit | | | | | | | |
| (expense) | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Total | | (5,400) | | (7,715) | | (20,473) | |
| comprehensive | | | | | | | |
| loss | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Total | | | | | | | |
| comprehensive | | | | | | | |
| income (loss) | | | | | | | |
| attributable | | | | | | | |
| to: | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Equity | | (5,400) | | (6,934) | | (17,469) | |
| holders | | | | | | | |
| of the | | | | | | | |
| Company | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Minority | | - | | (781) | | (3,004) | |
| interests | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | (5,400) | | (7,715) | | (20,473) | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Basic | | (0.14) | | (0.18) | | (0.46) | |
| and | | | | | | | |
| diluted | | | | | | | |
| loss | | | | | | | |
| per | | | | | | | |
| share | | | | | | | |
| attributable | | | | | | | |
| to Ordinary | | | | | | | |
| equity | | | | | | | |
| holders of | | | | | | | |
| the Company | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| Weighted | | 38,376,923 | | 38,376,923 | | 38,376,923 | |
| average | | | | | | | |
| number | | | | | | | |
| of | | | | | | | |
| shares | | | | | | | |
| used in | | | | | | | |
| computing | | | | | | | |
| basic and | | | | | | | |
| diluted | | | | | | | |
| net loss | | | | | | | |
| per share | | | | | | | |
| attributable | | | | | | | |
| to Ordinary | | | | | | | |
| equity | | | | | | | |
| holders of | | | | | | | |
| the Company | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | | | | | | |
+----------------+--------+------------+--------+------------+--------+------------+-----------------+
| | | |
| | | |
| The accompanying notes are an integral part of the | | |
| consolidated financial statements. | | |
+----------------+--------+------------+--------+------------+--------+------------+--------+--------+
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | Attributable to equity holders of the Company | | | | |
+--------------------------+----------+----------+----------------------------------------------------------------------------------------------------+----------+-----------+----------+----------+
| | | | Share | | Share | | Other | | Earnings | | Total | | Minority | | Total |
| | | | capital | | premium | | reserves | | (accumulated | | | | interests | | equity |
| | | | | | | | | | deficit) | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| Balance as of January 1, | | | 2,399 | | 23,892 | | 714 | | (1,418) | | 25,587 | | - | | 25,587 |
| 2010 | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| Total comprehensive | | | - | | - | | - | | (5,400) | | (5,400) | | - | | (5,400) |
| loss | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| Cost of share based | | | - | | - | | 44 | | | | 44 | | - | | 44 |
| payment | | | | | | | | | - | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| Balance as of June 30, | | | 2,399 | | 23,892 | | 758 | | (6,818) | | 20,231 | | - | | 20,231 |
| 2010 | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | |
+--------------------------+----------+----------+----------------------------------------------------------------------------------------------------+----------+-----------+----------+----------+
| | | | Attributable to equity holders of the Company | | | | |
+--------------------------+----------+----------+----------------------------------------------------------------------------------------------------+----------+-----------+----------+----------+
| | | | Share | | Share | | Other | | Retained | | | | Minority | | Total |
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | capital | | premium | | reserves | | earnings | | Total | | interests | | equity |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| Balance as of January 1, | | | 2,399 | | 23,892 | | 624 | | 16,051 | | 42,966 | | 3,004 | | 45,970 |
| 2009 | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| Total comprehensive | | | - | | - | | - | | (6,934) | | (6,934) | | (769) | | (7,703) |
| loss | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| Cost of share based | | | - | | - | | 165 | | - | | 165 | | - | | 165 |
| payment | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| Balance as of June 30, | | | 2,399 | | 23,892 | | 789 | | 9,117 | | 36,197 | | 2,235 | | 38,432 |
| 2009 | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | Attributable to equity holders of the Company | | | | |
+--------------------------+----------+----------+----------------------------------------------------------------------------------------------------+----------+-----------+----------+----------+
| | | | Share | | Share | | Other | | Retained | | | | Minority | | Total |
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | capital | | premium | | reserves | | earnings | | Total | | interests | | equity |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| Balance as of January 1, | | | 2,399 | | 23,892 | | 624 | | 16,051 | | 42,966 | | 3,004 | | 45,970 |
| 2009 | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| Total comprehensive | | | - | | - | | - | | (17,469) | | (17,469) | | (3,004) | | (20,473) |
| loss | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| Cost of share based | | | - | | - | | 90 | | - | | 90 | | - | | 90 |
| payment | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| Balance as of December | | | 2,399 | | 23,892 | | 714 | | (1,418) | | 25,587 | | - | | 25,587 |
| 31, 2009 | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
+--------------------------+----------+----------+---------+----------+---------+----------+----------+----------+--------------+----------+----------+----------+-----------+----------+----------+
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
+------------------------------------------+----+---------------------+----+---------+----+----------+----+----+
| | | Unaudited six | | Audited |
| | | months, ended | | year |
| | | June 30, | | ended |
| | | | |December |
| | | | | 31, |
+------------------------------------------+----+------------------------------------+----+----------+
| | | 2010 | | 2009 | | 2009 |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Cash flows from operating activities: | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Loss for the year | | (5,400) | | (7,715) | | (20,473) |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Adjustments to reconcile net loss to net | | | | | | |
| cash provided by operating activities: | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Adjustments to the profit or loss items: | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Depreciation | | 1,313 | | 1,284 | | 2,335 |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Impairment of property, plant and | | - | | - | | 2,227 |
| equipment | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Write-down of inventories | | - | | - | | 1,497 |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Amortization and impairment of deferred | | - | | 76 | | 528 |
| finance costs | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Loss (profit) on marketable securities | | (14) | | (10) | | (58) |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Gain on sale of property, plant and | | (3) | | 41 | | (73) |
| equipment | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Employee benefit obligations | | 148 | | (30) | | 64 |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Accrued interest and foreign exchange | | 163 | | 306 | | 1,183 |
| differences on | | | | | | |
| short and long-term liabilities, net | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Cost of share based payments | | 44 | | 165 | | 90 |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Deferred taxes | | - | | 619 | | (79) |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Income tax benefit | | - | | - | | (86) |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| | | 1,651 | | 2,451 | | 7,628 |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Working capital adjustments: | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Decrease (increase) in trade | | (357) | | 6,581 | | 1,401 |
| receivables, net | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Decrease (increase) in other accounts | | (1,565) | | 1,644 | | 4,125 |
| receivable | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Decrease in inventory | | 4,141 | | 11,555 | | 19,861 |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Increase (decrease) in trade payables | | 2,883 | | (9,738) | | (9,093) |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Increase in related parties, net | | (25) | | | | (211) |
| | | | | - | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Increase (decrease) in other accounts | | (309) | | 155 | | (1,094) |
| payable | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| | | 4,768 | | 10,197 | | 14,989 |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Cash paid and received during the year | | | | | | |
| for: | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Interest received | | - | | 11 | | 18 |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Interest paid | | (319) | | (317) | | (904) |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Income tax received | | 3 | | - | | 834 |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Income tax paid | | - | | (83) | | (121) |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| | | (316) | | (389) | | (173) |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| Net cash provided by operating | | 703 | | 4,544 | | 1,971 |
| activities: | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| | | | | | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+
| | | |
+------------------------------------------+----+---------------------+----+---------+----+----------+----+----+
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
+----------------------------------------+----------+---------+----------+---------+----------+----------+----------+----------+
| | | Unaudited six months, | | Audited | |
| | | ended June 30, | | year | |
| | | | | ended | |
| | | | | December | |
| | | | | 31, | |
+----------------------------------------+----------+------------------------------+----------+----------+---------------------+
| | | 2010 | | 2009 | | 2009 | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Cash flows from investing activities: | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Purchase of property, plant and | | (880) | | (1,017) | | (1,148) | |
| equipment | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Proceeds from sale of property, plant | | 7 | | - | | 116 | |
| and equipment | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Proceeds from disposal of available | | 100 | | - | | - | |
| for sale | | | | | | | |
| investments | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Increase in restricted cash | | (10) | | (1,061) | | (842) | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Net cash used in investing activities | | (783) | | (2,078) | | (1,874) | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Cash flows from financing activities: | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Dividend paid | | - | | (112) | | (180) | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Proceeds from short -term loans | | - | | - | | 185 | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Repayment from short -term loans | | (2,658) | | - | | - | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Repayment of long-term loans | | (1,759) | | (4,950) | | (1,607) | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Proceeds of long-term loans | | 5,507 | | - | | - | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Decrease in short-term bank credit, | | (2,234) | | (434) | | (4,628) | |
| net | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Net cash used in financing activities | | (1,144) | | (5,496) | | (6,230) | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Decrease in cash and cash equivalents | | (1,224) | | (3,030) | | (6,133) | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Cash and cash equivalents at the | | 5,879 | | 12,012 | | 12,012 | |
| beginning of the year | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Cash and cash equivalents at the end | | 4,655 | | 8,982 | | 5,879 | |
| of the year | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Significant non- cash transactions: | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| Purchase of property, plant and | | | | | | 73 | |
| equipment on credit | | - | | - | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| | | | | | | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+---------------------+
| | | |
+----------------------------------------+----------+---------+----------+---------+----------+----------+----------+----------+
The accompanying notes are an integral part of the consolidated financial
statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 1 - GENERAL:
The interim financial statement as of 30 June 2010 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 2009 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 2009
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 month, ended | | Audited |
| | | June 30, | | year |
| | | | | ended |
| | | | |December |
| | | | | 31, |
+--------+------+----------------------------+----------+----------+
| | | 2010 | | 2009 | | 2009 |
+--------+------+--------+----------+--------+----------+----------+
| | | | | | | |
+--------+------+--------+----------+--------+----------+----------+
| United | 10,472 | | 6,583 | | 13,851 |
| States | | | | | |
+---------------+--------+----------+--------+----------+----------+
| China | | - | | 1,189 | | 2,861 |
+--------+------+--------+----------+--------+----------+----------+
| Japan | | 108 | | 1,445 | | 1,493 |
+--------+------+--------+----------+--------+----------+----------+
| Korea | | - | | 1,030 | | 1,034 |
+--------+------+--------+----------+--------+----------+----------+
| Europe | | 5,722 | | 5,881 | | 10,514 |
| | | | | | | |
+--------+------+--------+----------+--------+----------+----------+
| Israel | | 890 | | 37 | | 768 |
+--------+------+--------+----------+--------+----------+----------+
| South | 3,963 | | 1,914 | | 5,359 |
| Africa | | | | | |
+---------------+--------+----------+--------+----------+----------+
| Others | | 162 | | 2,355 | | 862 |
+--------+------+--------+----------+--------+----------+----------+
| | | | | | | |
+--------+------+--------+----------+--------+----------+----------+
| | | 21,317 | | 20,434 | | 36,742 |
+--------+------+--------+----------+--------+----------+----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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