Q3 2022 Financial Results

RNS Number : 9720G

MTI Wireless Edge Limited

21 November 2022

 

21 November 2022

MTI Wireless Edge Ltd

("MTI", the "Company" or the "Group")

Q3 2022 Financial Results

MTI Wireless Edge Ltd (AIM: MWE), the technology group focused on comprehensive communication and radio frequency solutions across multiple sectors, is pleased to announce its financial results for the nine-month period ended 30 September 2022 (the "Period").

Financial highlights

· Strong trading during the Period with revenue growth of 8% to $34.8m (2021: $32.1m)

· Increased EBITDA, up 14% to $4.58m (2021: $4.03m)

· One-off acquisition and depreciation costs led to net profit of $2.74m (2021: $2.70m)

· Earnings per share increased to 2.99 US cents ( 2021 : 2.95 US cents)

· Company remains ungeared with net cash of $5.2m as at 30 September 2022

· Final dividend anticipated to be declared in MTI's full year results announcement

Operational highlights

· A strong trading quarter across all business divisions, all grew and all were profitable

· MTI Summit had a good quarter and is enjoying another successful year

o  The division is benefitting from: i) new contract wins; ii) successful integration of PSK; and iii) the 3 year strategic agreement signed last year with a significant defence customer resulting in increased sales

o  PSK (51% stake acquired in January 2022) secured the Group's largest ever contract in July 2022, expected to be worth $10m over the next 7 years, providing services and maintenance support, to the Israeli Ministry of Defence

· Antenna division continues to expand its presence in the 5G market

o  The division is working with 5 out of the 7 leading Original Equipment Manufacturers and, through the new ABS antenna solution, is now working with nearly all of the Tier 1 OEMs

o  5G in India shows substantial potential in coming years, with Q4 already expected to benefit from sales into this market

· Mottech continued to perform well

o  Good level of renewals with key municipality customers coupled to successful price increases, the effect of such is to be seen starting in 2023

o  Potential for further growth in fountain management

o  Good progress in Italy and successful launch of the ICC Pro Autopilot, the first AgroGation system

Moni Borovitz, Chief Executive Officer of MTI Wireless Edge, said:

"Q3 2022 represented an excellent performance compared to Q3 2021, showing double digit growth in revenue and profits all the way to EPS. We remain very focused on providing radio frequency solutions across our three divisions, each targeting specific markets where there is significant need for our services. Demand, as shown by the increase in sales, remains strong and our markets are nearly back to normal with shipment cost s reduced relatively to the high cost during COVID-19, and microchip shortages also reducing. Overall, the Company is in a strong position, with net cash of $5.2m and no borrowings, to continue to grow both organically and by acquisition.

"Our antenna division is well positioned within the evolving 5G market. The main growth from 5G is still yet to come so we are positioning ourselves with most of the major players and demonstrating the strength of our solutions. India, a key market, where we have a physical presence, recently completed a 5G auction. This is leading to rapidly increasing demand and the forecasts for the number of new Eband towers is substantial.

"PSK has proven to be a strong addition to the Group. Since the Company acquired 51% of PSK in January 2022, the company has won significant orders primarily from within the defence sector.

"The summer just ended was one of the driest on record, accentuating the need to address the growing problem of water scarcity. There remains substantial unnecessary wastage of water, however, there is increasing awareness of solutions like Mottech's, where around 35% of the volume of water previously used can now be saved.

"Going into the final quarter of this year, the Company is well placed to deliver a good result for the year."

Moni Borovitz, Chief Executive Officer, will provide a live investor presentation relating to the financial results for the nine-month period ended 30 September 2022 via the Investor Meet Company ("IMC") platform today at 09.30 am UK time.

Investors can sign up for free via: https://www.investormeetcompany.com/mti-wireless-edge-ltd/register-investor

For further information please contact:

MTI Wireless Edge Ltd	[phone]
Moni Borovitz, CEO	http://www.mtiwirelessedge.com
Allenby Capital Limited (Nomad and Joint Broker)	[phone]
Nick Naylor/Alex Brearley/Piers Shimwell (Corporate Finance)
Amrit Nahal/David Johnson (Sales and Corporate Broking)
Shore Capital (Joint Broker) Toby Gibbs/John More (Corporate Advisory) Fiona Conroy (Corporate Broking)	[phone]
Novella (Financial PR)
Tim Robertson/Safia Colebrook	[phone]

About MTI Wireless Edge Ltd. ("MTI")

Headquartered in Israel, MTI is a technology group focused on comprehensive communication and radio frequency solutions across multiple sectors through three core divisions:

Antenna Division

MTI is a world leader in the design, development and production of high quality, state-of-the-art, and cost-effective antenna solutions including Smart Antennas, MIMO Antennas and Dual Polarity Antennas for wireless applications. MTI supplies antennas for both military and commercial markets from 100 KHz to 90 GHz.

Internationally recognized as a producer of commercial off-the-Shelf and custom-developed antenna solutions in a broad frequency range, MTI addresses both commercial and military applications.

MTI supplies directional and omnidirectional antennas for outdoor and indoor deployments, including smart antennas for WiMAX, Broadband access, public safety, RFID, base stations and terminals for the utility market.

Military applications include a wide range of broadband, tactical and specialized communication antennas, antenna systems and DF arrays installed on numerous airborne, ground and naval, including submarine, platforms worldwide.

Water Control & Management Division

Via its subsidiary, Mottech Water Solutions Ltd ("Mottech"), MTI provides high-end remote control solutions for water and irrigation applications based on Motorola's IRRInet state-of-the-art control, monitoring and communication technologies.

As Motorola's global prime-distributor Mottech serves its customers worldwide through its international subsidiaries and a global network of local distributors and representatives. With over 25 years of experience in providing customers with irrigation remote control and management, Mottech's solutions ensure constant, reliable and accurate water usage, while reducing operational and maintenance costs. Mottech's activities are focused in the market segments of agriculture, water distribution, municipal and commercial landscape as well as wastewater and storm-water reuse.

Distribution & Professional Consulting Services Division

Via its subsidiary, MTI Summit Electronics Ltd., MTI offers consulting, representation and marketing services to foreign companies in the field of RF and Microwave solutions and applications including engineering services (including design and integration) in the field of aerostat systems and the ongoing operation of Platform subsystems, SIGINT, RADAR, communication and observation systems which is performed by the Company.

MTI WIRELESS EDGE LTD.

 (An Israeli Corporation)

INTERIM CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME

	Nine month period ended  September 30,				Year ended December 31,
	2022		2021		2021
	U.S. $ in thousands   (Except per share data)
	Unaudited
Revenues	34,783		32,062		43,184
Cost of sales	23,927		22,108		29,6 85
Gross profit	10,856		9,954		13,499
Research and development expenses	789		725		965
Distribution expenses	2,855		2,647		3,686
General and administrative expenses	3,719		3,270		4,448
Loss (profit) from sale of property, plant and equipment	8		(16)		25
Profit from operations	3,485		3,328		4,425
Finance expenses	350		252		454
Finance income	(108)		(30)		(67)
Profit before income tax	3,243		3,106		4,038
Tax expenses	505		406		329
Profit	2,738		2,700		3,709
Other comprehensive income (loss) net of tax:
Items that will not be reclassified to profit or loss:
Re-measurement of defined benefit plans	-		-		22
Items that may be reclassified to profit or loss:
Adjustment arising from translation of financial statements of foreign operations	(365)		(106)		(19)
Total other comprehensive income (loss)	(365)		(106)		3
Total comprehensive income	2,373		2,594		3,712
Profit attributable to:
Owners of the parent	2,643		2,612		3,598
Non-controlling interests	95		88		111
	2,738		2,700		3,709
Total comprehensive income attributable to:
Owners of the parent	2,278		2,506		3,601
Non-controlling interests	95		88		111
	2,373		2,594		3,712
Earnings per share (dollars)
Basic and Diluted (dollars per share)	0.0299		0.0295		0.0407
Weighted average number of shares outstanding
Basic and Diluted (dollars per share)	88,494,239		88,516,849		88,509,740

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENTS OF

CHANGES IN EQUITY

For the nine-month period ended September 30, 2022 (Unaudited):

	Attributable to owners of the parent
	Share capital	Additional paid-in capital	Translation differences	Retained earnings	Total attributable to owners of the  parent	Non-controlling interest	Total equity
	U.S. $ in thousands
Balance at January 1, 2022	209	23,126	172	2,406	25,913	1,098	27,011
Changes during the nine-month period   ended September 30, 2022:
Comprehensive income
Profit for the period	-	-	-	2,643	2,643	95	2,738
Other comprehensive income
Translation differences	-	-	(365)	-	(365)	-	(365)
Total comprehensive income for the period	-	-	(365)	2,643	2,278	95	2,373
Acquisition and disposal of treasury shares	-	(87)	-	-	(87)	-	(87)
Dividend	-	-	-	(2,479)	(2,479)	-	(2,479)
Balance at September 30, 2022	209	23,039	(193)	2,570	25,625	1,193	26,818

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENTS OF

CHANGES IN EQUITY (CONT.)

For the nine month period ended September 30, 2021 (Unaudited):

	Attributed to owners of the parent
	Share capital	Additional paid-in capital	Capital reserve for share-based payment transactions	Translation differences	Retained earnings	Total attributable to owners of the  parent	Non-controlling interest	Total equity
	U.S. $ in thousands
Balance at January 1, 2021	209	23,167	-	191	999	24,566	987	25,553
Changes during the nine month period   ended September 30, 2021:
Comprehensive income
Profit for the period	-	-	-	-	2,612	2,612	88	2,700
Other comprehensive loss
Translation differences	-	-	-	(106)	-	(106)	-	(106)
Total comprehensive income (loss) for the period	-	-	-	(106)	2,612	2,506	88	2,594
Profit from acquisition of treasury shares	-	5	-	-	-	5	-	5
Dividend	-	-	-	-	(2,213)	(2,213)	-	(2,213)
Balance at September 30, 2021	209	23,172	-	85	1,398	24,864	1,075	25,939

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONT.)

For the year ended December 31, 2021 :

	Attributable to owners of the parent
	Share capital	Additional paid-in capital	Translation differences	Retained earnings	Total attributable to owners of the parent	Non-controlling interests	Total equity
	U.S. $ in thousands
Balance as at January 1, 2021	209	23,167	191	999	24,566	987	25,553
Changes during 2021:
Comprehensive income
Profit for the year	-	-	-	3,598	3,598	111	3,709
Other comprehensive income
Re measurements on defined benefit plans	-	-	-	22	22	-	22
Translation differences	-	-	(19)	-	(19)	-	(19)
Total comprehensive income (loss) for the year	-	-	(19)	3,620	3,601	111	3,712
Dividend	-	-	-	(2,213)	(2,213)	-	(2,213)
Acquisition and disposal of treasury shares	-	(41)	-	-	(41)	-	(41)
Balance as at December 31, 2021	209	23,126	172	2,406	25,913	1,098	27,011

The accompanying notes form an integral part of the financial statement.

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

INTERIM CONSOLIDATED STATEMENTS OF

FINANCIAL POSITION

	30.09.2022		30.09.2021		31.12.2021
	U.S. $ in thousands
	Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	5,280		9,323		12,567
Trade and other receivables	13,798		11,168		10,628
Unbilled revenue	2,760		2,700		2,794
Current tax receivables	444		482		518
Inventories	6,745		5,985		6,849
	29,027		29,658		33,356
NON-CURRENT ASSETS:
Long term prepaid expenses	40		38		26
Property, plant and equipment	5,801		5,570		5,548
Deferred tax assets	1,113		744		994
Intangible assets	3,928		1,027		1,014
	10,882		7,379		7,582
Total assets	39,909		37,037		40,938

The accompanying notes form an integral part of the financial statements.

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

INTERIM CONSOLIDATED STATEMENTS OF

F INANCIAL P OSITION

	30.09.2022		30.09.2021			31.12.2021
	U.S. $ In thousands
	Unaudited
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities and short term bank credit and loans	17		20		23
Trade payables	6,080		5,282		5,346
Other accounts payable	3,827		4,425		6,895
Current tax payables	439		82		322
	10,363		9,809		12,586
NON- CURRENT LIABILITIES:
Contingent consideration	1,432		-		-
Lease liabilities	401		438		465
Loans from banks, net of current maturities	37		17		8
Employee benefits, net	858		834		868
	2,728		1,289		1,341
Total liabilities	13,091		11,156		13,927
EQUITY
Equity attributable to owners of the parent
Share capital	209		209		209
Additional paid-in capital	23,039		23,172		23,126
Translation differences	(193)		85		172
Retained earnings	2,570		1,398		2,406
	25,625		24,864		25,913
Non-controlling interest	1,193		1,075		1,098
Total equity	26,818		25,939		27,011
Total equity and liabilities	39,909		37,037		40,938

November 20, 2022
Date of approval of financial statements	Moshe Borovitz Chief Executive Officer	Elhanan Zeira Controller	Zvi Borovitz Non-executive Chairman of the Board

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

		Nine month period ended  September 30,					Year ended December 31,
		2022		2021		2021
		U.S. $ in thousands
		Unaudited
Cash Flows from Operating Activities:
Profit for the period		2,378		2,700		3,709
Adjustments for:
Depreciation and amortization		1,090		702		976
Loss (Gain) from sale of property, plant and equipment		-		47		(25)
Finance (income) expenses, net		(95)		24		53
Tax expenses		505		406		329
Changes in operating assets and liabilities:
Decrease (increase) in inventories		(35)		357		(479)
Decrease (increase) in trade receivables		(2,607)		(15)		604
Decrease (increase) in other accounts receivables		(440)		(382)		(448)
Decrease (increase) in unbilled revenues		34		(492)		(476)
Increase (decrease) in trade and other accounts payables		172		376		2,803
Increase (decrease) in employee benefits, net		(114)		8		64
Cash from operations		1,248		3,731		7,110
Interest received		-		3		52
Interest paid		(41)		(30)		(88)
Income tax paid		(848)		(511)		(481)
Net cash provided by operating activities		359		3,193		6,593

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS (cont.)

					Nine month period ended  September 30,				Year ended December 31,
					2022		2021		2021
					U.S. $ in thousands
					Unaudited
Cash Flows From Investing Activities:
Proceeds from sale of property, plant and equipment					-		77		153
Acquisition of subsidiary, net of cash acquired					(1,427)		-		-
Net cash from sale of previously consolidated subsidiaries					(2,785)		-		-
Change (payment) of contingent consideration regarding business acquisition					-		(54)		(54)
Purchase of property, plant and equipment					(421)		(766)		(835)
Net cash used in investing activities					(4,633)		(743)		(736)
Cash Flows From Financing Activities:
Dividend					(2,479)		(2,213)		(2,213)
Payments of lease liabilities					(429)		(324)		(449)
Short-term loans and credit line received from banks					34		-		-
Treasury shares acquired					(87)		5		(41)
Treasury shares sold					-		-		-
Repayment of long-term loans from banks					(7)		(111)		(117)
Net cash used in financing activities					(2,968)		(2,643)		(2,820)
(Decrease)/Increase in cash and cash equivalents during the period					(7,242)		(193)		3,037
Cash and cash equivalents  at the beginning of the period					12,567		9,577		9,577
Exchange differences on balances of cash and  cash equivalents					(45)		(61)		(47)
Cash and cash equivalents  at the end of the period					5,280		9,323		12,567

The accompanying notes form an integral part of the financial statements.

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - General:

Corporate information:

M.T.I Wireless Edge Ltd. (hereafter - the "Company", or collectively with its subsidiaries, the "Group") is an Israeli corporation. The Company was incorporated under the Companies Act in Israel on December 30, 1998, and commenced operations on July 1, 2000. Since March 2006, the Company's shares have been traded on the AIM market of the London Stock Exchange.

The formal address of the Company is 11 Hamelacha Street, Afek industrial Park, Rosh-Ha'Ayin, Israel.

The Company and its subsidiaries are engaged in the following areas:

-  Development, design, manufacture and marketing of antennas for the military and civilian sectors.

-  A leading provider of remote control solutions for water and irrigation applications based on Motorola's IRRInet state of the art control, monitoring and communication technologies.

-  Providing consulting, representation and marketing services to foreign companies in the field of RF and Microwave, including engineering services in the field of aerostat systems and system engineering services.

Note 2 - Significant Accounting Policies:

The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in International Accounting Standard No. 34 ("Interim Financial Reporting").

The interim consolidated financial information set out above does not constitute full year-end accounts within the meaning of Israeli Companies Law . It has been prepared on the going concern basis in accordance with the recognition and measurement criteria of the International Financial Reporting Standards (IFRS). Statutory financial information for the financial year ended December 31, 2021 was approved by the board on March 6, 2022. The report of the auditors on those financial statements was unqualified.

The interim consolidated financial statements as of September 30, 2022 have not been audited.

The interim consolidated financial information should be read in conjunction with the annual financial statements as of December 31, 2021 and for the year then ended and with the notes thereto. The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2021 are applied consistently in these interim consolidated financial statements.

Note 3 - Acquisition of subsidiary:

On 3 January 2022 the Company, via its wholly-owned subsidiary, MTI Summit Electronics Ltd. ("MTI Summit"), entered into a share purchase agreement, which included both a purchase of existing shares in and the making of a new equity investment into P.S.K. WIND Technologies Ltd. ("PSK"), after which MTI Summit owns 51% of PSK (the "Acquisition"). The initial consideration for the Acquisition was approximately US$1.2 million, with an earn out payment, subject to performance, of up to approximately US$2.56 million. In addition, MTI Summit has made a loan to PSK of US$0.8 million and is party to an option agreement in relation to the acquisition of the remaining 49% of PSK.

The initial consideration paid by MTI, to acquire 51% of the equity in PSK, comprised: a) the purchase of existing shares in PSK for NIS 700,000 (approximately US$225,000); and b) a subscription of NIS 3,000,000 (approximately US$ 972,000) for new shares in PSK.  In addition, there is an earn out mechanism under which further consideration may be payable, as described in the contingent consideration section below (the "Earn Out").  MTI Summit's loan to PSK of NIS 2,500,000 (approximately US$800,000) is a term loan which is to be repaid on 1 January 2024. The loan is not convertible and bears interest of 3.26% per annum.

In addition to the Acquisition, MTI Summit has an option to purchase and the vendors of PSK have an option to sell to MTI Summit the remaining 49% of PSK (the "Option") starting from 2027, subject to the terms described below.

Cash outflow on the Acquisition totalled to US$ 1,427,000.

Acquisition cost of PSK at the date of Acquisition:

		Fair value
		$'000
		Unaudited
Cash paid		1,197
Contingent consideration liability		56
Put option liability		1,376
Total acquisition cost		2,629

Note 3 - Acquisition of subsidiary (cont'):

Set forth below are the assets and liabilities of PSK at the date of Acquisition:

		Fair value
		$'000
		Unaudited
Trade receivables		671
Other receivables		213
Inventories		65
Property, plant and equipment		256
Intangible assets		1,710
Bank loans		(230)
Trade payables		(522)
Deferred tax liability		(394)
Other liabilities		(436)
Employee benefits, net		(104)
Net identifiable assets		1,229
Goodwill arising on acquisition		1,400
Total purchase cost		2,629

The results of PSK were consolidated into the financial statements of the Group from the beginning of the year.

The cost of the Acquisition was allocated to tangible assets, intangible assets and liabilities which were acquired based on their fair value at the time of the acquisition. The intangible assets recognized include order backlog and customer relations in the total amount of US$ 111 thousands and US$ 1,599 thousands respectively, deferred taxes in the total amount of US$ 394 thousands and goodwill in the total amount US$ 1,400 thousands. The intangible assets associated with customer relations are amortized over an useful life of up to 15 years.

The goodwill arising on Acquisition is attributed to the expected benefits from the synergies of the combination of the activities of the Company and PSK. The goodwill recognized is not expected to be deductible for income tax purposes.

All transaction costs have been recorded in General and administrative expenses.

Contingent consideration:

As part of the purchase agreement with the owners of PSK, it was agreed that the sellers, who retain a 49% holding in PSK would be entitled to further consideration to be paid pursuant to an earn out mechanism dependent on PSK's actual revenues in 2022 and 2024 versus certain agreed targets in each of those years and is capped at a maximum of NIS 8,000,000 (approximately US$2.56m), to be paid in cash.

Note 3 - Acquisition of subsidiary (cont'):

Put Option liability:

MTI Summit has an option to purchase and the vendors of PSK have an option to sell to MTI Summit the remaining 49% of PSK (the "Option") starting from 2027 . The value of PSK under the Option is to be calculated on the basis of eight times the average EBITDA level of PSK in 2025 and 2026, with MTI being required to pay 49% of this value upon exercise. If the Option is to be exercised at any time after the preparation of PSK's financial results for the first quarter of 2027, the calculation will be based on PSK's average EBITDA for the last eight quarters.  The Option will remain in place until exercised.  

As at the Acquisition date, the fair value of the contingent consideration was estimated at US$ 56 thousand and the Option at US$ 1.376 million.

The significant non-observable data used in measuring the fair value of the liability in respect of the contingent consideration and the Put Option liability are as follows:

Discount rate: 15.5%

A significant increase (or decrease) in the estimated amount of the acquired company's pre-tax income will result in a significant increase (decrease) in the fair value of the liability in respect of the contingent consideration whereas a significant increase (decrease) in the discount rate and default risk rate will result in a decrease (an increase) in the fair value of the liability.

Note 4 - REVENUES:

		Nine month period ended    September 30,				Year ended December 31,
		2022		2021			2021
		U.S. $ in thousands
		Unaudited
Revenues arise from:
Sale of goods*		26,573		26,484			35,308
Rendering of services**		5,603		3,900			5,729
Projects**		2,607		1,678			2,147
		34,783		32,062			43,184

(*) at the point in time

(**) over time

Note 5 - operating SEGMENTS:

The following tables present revenue and profit information regarding the Group's operating segments for the nine month period ended September 30, 2022 and 2021 respectively and for the year ended December 31, 2021.

Nine month period ended September 30, 2022 (Unaudited):

	Antennas	Water Solutions	Distribution & Consultation Services	Adjustment & Elimination	Total
	U.S. $ in thousands
Revenues
External	8,627	13,743	12,413	-	34,783
Internal	-	-	252	(252)	-
Total	8,627	13,743	12,665	(252)	34,783
Segment profit	254	1,282	1,814	135	3,485
Finance expense, net					242
Tax expenses					505
Profit					2,738

As of 30 September, 2022:

	Antennas	Water Solutions	Distribution & Consultation Services	Adjustment & Elimination	Total
	U.S. $ in thousands
Segment assets	14,923	11,805	10,650	-	37,378
Unallocated assets					2,531
Segment liabilities	3,070	4,316	4,762	-	12,147
Unallocated liabilities					944

Nine month period ended September 30, 2021 (Unaudited):

	Antennas	Water Solutions	Distribution & Consultation Services	Adjustment & Elimination	Total
	U.S. $ in thousands
Revenues
External	8,591	13,049	10,422	-	32,062
Internal	-	-	105	(105)	-
Total	8,591	13,049	10,527	(105)	32,062
Segment profit	425	1,417	1,297	189	3,328
Finance expense, net					222
Tax expenses					406
Profit					2,700

Note 5 - operating SEGMENTS (CONT.):

As of 30 September, 2021:

	Antennas	Water Solutions	Distribution & Consultation Services	Adjustment & Elimination	Total
	U.S. $ in thousands
Segment assets	15,069	10,894	8,307	-	34,270
Unallocated assets					2,825
Segment liabilities	3,169	3,926	3,130	-	10,225
Unallocated liabilities					931

Year ended December 31, 2021

	Antennas	Water Solutions	Distribution & Consultation Services	Adjustment & Elimination	Total
	U.S. $ in thousands
Revenues
External	11,294	17,606	14,284	-	43,184
Inter-segment	-	-	174	(174)	-
Total	11,294	17,606	14,458	(174)	43,184
Segment profit	282	2,074	1,845	224	4,425
Finance expense, net					387
Tax expenses					329
Profit					3,709

 

31 December, 2021:

	Antennas	Water Solutions	Distribution & Consultation Services	Adjustment & Elimination	Total
	U.S. $ in thousands
Segment assets	14,399	11,100	11,999	-	37,498
Unallocated assets					3,440
Segment liabilities	3,090	3,626	6,282	-	12,998
Unallocated liabilities					929

Note 6 - sale of previously consolidated subsidiaries:

On 22 March 2022, the Company announced that it had disposed of its Russian operations and sold its entire holding in M.T.I Summit SPB ltd. ("SPB") for a de minimis amount, with this sale not having any significant profit/loss impact on the Company.

The effect of the sale on the financial position of the Group is as follows:

		$'000
		Unaudited
Other receivables		(417)
Inventories		(6)
Current tax receivables		(10)
Cash and cash equivalents		(2,785)
Other trade payables		3,218
Net assets and liabilities		-
Consideration received, satisfied in cash		-
Cash and cash equivalents disposed of		(2,785)
Net cash outflows		(2,785)

Note 7 - SIGNIFICANT EVENTS:

A.  On 6 March 2022, the Board of directors declared a cash dividend of 2.8 US cents per share, representing approximately $2,479,000, in total. This dividend was paid on 31 March 2022 to shareholders on the register at the close of trading on 18 March 2022.

B.  On 24 January 2019, the Company announced a share repurchase program to conduct market purchases of ordinary shares of par value 0.01 Israeli Shekels each ("Ordinary Shares") in the Company up to a maximum value of £150,000 (the "Programme"). Thereafter, the board of directors of the Company and the board of directors of MTI Engineering decided to continue with the Programme for several further periods. On 13 April 2022, the Company announced that it would extend the Programme until 31 March 2023, with the Programme having an increased maximum value of up to £200,000 and with the Programme being managed by Shore Capital Stockbrokers Limited pursuant to the terms as announced. As at 30 September 2022, 200,000 Ordinary Shares were held in treasury under the Programme.

C.  On 9 March 2022 at an extraordinary shareholders meeting, Mr. Luke Ahern was elected as an external director for three year term. At the same meeting approval for the extension of an updated Remuneration Policy for a period of three years or for a longer period, to the extent prescribed in the provisions of the Israeli Companies Law, was granted as well as the extension of an updated management services agreement (the "Management Services Agreement"), between the Company and Mokirei Aya Management (2003) Ltd. (the "Management Company") for the provision of the services of the Chairman

Note 7 - SIGNIFICANT EVENTS (CONT.):

and CEO of the Company for a further three years or for a longer period, to the extent prescribed in the provisions of the Israeli Companies Law with effect from 1 March 2022.

D.  Business Continuity - Since March 2022 most of the Group's operations have returned to a normal level of activity, but aspects of the Group's supply chain are still working slower, and the Company's industry has been affected on the operational level, along with the rest of the world economy as it faces the risk of a global recession where the ability to predict the timing of a recovery is uncertain. Inflation in the countries where the Group operates, as measured by the consumer price index, is currently increasing which is driving broad based cost increases, including increases in wages. This together with rising components prices and shortages, may have an impact on the Group's underlying cost base and profitability and could effect the Group's ability to supply part of the demand for its products and services. This uncertainty regarding the level of the global economic slowdown, its duration and its medium to long term effects creates challenges, but the Company believes that if there is no further deterioration in the situation, its financial strength and business stability will allow it to navigate through this.

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END

 

 

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