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Orpak Systems Ltd (ORPK)

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Tuesday 10 November, 2009

Orpak Systems Ltd

Orpak Third Quarter and Nine

RNS Number : 2864C
Orpak Systems Ltd
10 November 2009
 



10 November 2009 

Orpak Systems Ltd

("Orpak" or "the Company")


Financial results for the third quarter and nine months ended 30 September 2009

 

Orpak Systems Ltd, the leading provider of card-free secure fuel payment systems based on vehicle identification and end-to-end solutions for the automation of fuel stations, announces its financial results for the third quarter and nine months ended 30 September 2009.  


Third Quarter 2009 Highlights

  • Revenue was $12.9m (Q3 2008: $19.7m) 

  • Net profit increased 26% to $1.7m (Q3 2008: $1.4m)

  • Net cash and cash equivalents totaled $25.7m at 30 September 2009, although a dividend distribution of $1.1m was made on July 2009


Nine months ended 30 September 2009 Highlights

  • Revenue was $43.7m (2008: $52.4m)

  • Net profit increased 46% to $6.2m (2008: $4.2m); Non GAAP net profit was $6.7m (2008: $4.7m) 

  • Fully diluted earnings per share were $0.19 (2008: $0.13)

  • Executed cost cutting plan to restore bottom-line performance and mitigate impact of currency factors on operational efficiency

  • Finalised the equipment of 570 BP stations in Turkey with automation and fuel payment systems based on vehicle identification, and began to deliver the first batch of 40,000 vehicle identification units out of an anticipated total of approximately 65,000 vehicles

  • Received $1m from delivering on the Company's contract with Gilbarco Inc. (signed January 2009) to equip new fleet management systems of Gasboy International, part of the Gilbarco family of companies, with Orpak technology 

      ·     Progress made with opportunities in Europe, Africa and Asia


Outlook

  • Global macro-economic conditions continue to affect sales

  • Company continues to benefit from a high level of repeat business

  • For the full year 2009, the Company expects to continue to gain market share in emerging markets


Hayim Kohen, Chief Executive of Orpak, said: "We are pleased that this period has seen sustained momentum in net profit growth as we continue to deliver on our contracts and roll-out our products. Whilst the challenges of the economic conditions persist, demand for Orpak's products remains encouraging and we are focused on mitigating the negative impact of the market weakness, and so continuing the successes we have achieved to date. 


Looking ahead, the Company expects to continue to gain market share in emerging markets and as a result, the Board looks to the future with confidence.




Enquiries:


Orpak Systems Ltd

Hayim Kohen, CEO                          +972 3 577 6868

Hemi Shtral, CFO


Libertas Capital

Sandy Jamieson                                 +44 20 7569 9650


Corfin Communications

Harry Chathli, Claire Norbury             +44 20 7977 0020



Note to Editors

 

Orpak develops, manufactures and markets end-to-end solutions for the automation of fuel stations and fleet management. Orpak is a market leader in automated refueling systems that incorporate fuel payment based on vehicle identification. Using advanced technologies to meet customer requirements, Orpak's solutions integrate forecourt automation and management, convenience-store management systems, commercial and retail sales solutions, and fuel delivery systems. The Company's solutions are designed to benefit customers through enabling fuel savings, preventing fuel fraud, maximizing loyalty programs and providing other advanced services that increase profitability.

 

The Company's products have been delivered to more than 11,250 fuel stations and 2.5 million vehicles in 30 countries across the globe and are distributed through an international network of subsidiaries and partners.

 

Orpak has been ISO-9001 certified since 1995, and the Company's products meet appropriate local safety standards and regulations in markets in which it operates.

 

Orpak (AIM: ORPK) was admitted to AIM in December 2005.

  Financial review


Orpak is pleased to announce continued growth in operating profit for the third quarter and nine months ended 30 September 2009, reflecting sustained demand for the Company's products and services in key territories. 


Third quarter revenue was $12.9m (Q3 2008: $19.7m). Net profit for the third quarter increased 26% to $1.7m (Q3 2008: $1.4m).


Revenue for the nine months to 30 September 2009 was $43.7m (2008: $52.4m). Net profit increased 46% to $6.2m (2008: $4.2m)


Net profit, excluding the provision of expenses for stock option plans and the amortisation of intangible assets associated with acquisitions, amounted to $6.7m (2008: $4.7m). 


During 2009, the Company took firm action to address the challenges arising from the weakness in the financial markets by reducing operating expenses. These steps continue to produce encouraging results, and the benefits are expected to persist into the next quarters. 


Fully diluted earnings per share were $0.19 (2008: $0.13).


Sales and marketing expenditure amounted to $8.1m compared with $11.0m for the same period last year as the Company maintained a tight control over its operating costs in response to the economic downturn. 


Net cash and cash equivalents totaled $25.7m at 30 September 2009, although a dividend distribution of $1.1m was made on July 2009. 



Operating review


Orpak succeeded in increasing its market share in the territories in which it is established and continued to expand into new areas. During the third quarter, the Company's systems were delivered to 130 petrol stations and 60,000 vehicles bringing the total to 11,250 petrol stations and 2.5 million vehicles equipped to date, distributed across 30 countries.


For the nine month period, revenue in Europe fell to $34.0m (2008: $42.3m) due to the freeze on capital expenditure by oil companies as a result of the weakening global economic conditions. However, Europe remained the largest contributor to the Company's revenues as major orders, including contracts with oil companies in several countries in Eastern Europe, were delivered on time and within budget. 


Under a contract with BP in Turkey, Orpak delivered an additional 2,500 vehicle identification units, bringing the total to date to 40,000 out of an anticipated total of approximately 65,000 vehicles. This formed part of an ongoing contract with BP in Turkey, and further strengthens the Company's position in the region.


During the first nine months, the Company received $1m from delivering on its contract with Gilbarco Inc., that was signed in January 2009, to equip new fleet management systems of Gasboy International, part of the Gilbarco family of companies, with Orpak technology. The Gasboy products will be sold and supported in the United States exclusively through the existing network of Gasboy distributors and Authorized Service Contractors, and globally on a non-exclusive basis. The new Gasboy fleet management systems include: fleet head office, site controller, wireless vehicle identification, and fuel truck controller.



Outlook


Whilst the effects of the weakness in global economic conditions persists, interest in Orpak's products and services remains strong and the Company continues to benefit from a high level of repeat business. Going forward, Orpak expects to grow its market share in emerging markets, building on the strong foundations it has already establishedAs a result, and with indications of oil companies considering a return to investment in automated services for fleets and petrol forecourts, the Board looks to the future with confidence.

 

  Interim Condensed Consolidated Balance Sheets as at





September 30

December 31



2009

2008

2008



Unaudited

Unaudited

Audited



$ thousands

$ thousands

$ thousands

Assets










Current assets










Cash and cash equivalents


 9,978 

 15,014 

 17,130 

Held for trading investments


 396 

 17,554 

 15,046 

Held to maturity investments


 1,386 

 - 

 - 

Trade receivables


 15,644 

 10,249 

 13,121 

Other receivables


 2,713 

 2,820 

 2,539 

Inventories


 7,238 

 8,974 

 7,551 






Total current assets


 37,355 

 54,611 

 55,387 






Non-current assets










Held to maturity investments


 15,686 

 2,463 

 2,190 

Deferred income tax assets


 520 

 524 

 486 

Employee benefits


 344 

 171 

 424 








 16,550 

 3,158 

 3,100 






Property and equipment, net


 2,545 

 3,079 

 2,788 






Intangible assets


 19,630 

 19,037 

 17,170 






Total non-current assets


 38,725 

 25,274 

 23,058 































Total assets


 76,080 

 79,885 

 78,445 




    Alex Milner           Chairman of the Board





    Hayim Kohen         General Manager and Member of the Board





    Hemi Shtral            Chief Financial Officer


Date of approval of the financial statements: November 10, 2009


  

Interim Condensed Consolidated Balance Sheets as at 






September 30

December 31



2009

2008

2008



Unaudited

Unaudited

Audited



$ thousands

$ thousands

$ thousands

Liabilities and equity










Current liabilities





Bank overdraft


 1 

 1 

 70 

Short-term loans from banks


 1,730 

 1,951 

 1,710 

Trade payables


 3,213 

 5,835 

 6,215 

Other payables


 11,240 

 12,709 

 13,955 






Total current liabilities


 16,184 

 20,496 

 21,950 






Non-Current liabilities





Deferred taxes liabilities


 1,709 

 2,031 

 2,093 

Employee benefits


 286 

 276 

 246 

Other long-term liabilities


 6,262 

 5,145 

 5,250 






Total non-current liabilities


 8,257 

 7,452 

 7,589 
















Total liabilities


 24,441 

 27,948 

 29,539 






Equity





Share capital


 179 

 179 

 179 

Share premium


 21,705 

 21,705 

 21,705 

Treasury shares


(2,327)

(501)

(501)

Translation reserve


 2,824 

 7,156 

 1,967 

Retained earnings


 27,912 

 22,395 

 24,401 






Total equity attributable to equity holders of the parent


 50,293 

 50,934 

 47,751 






Minority interest


 1,346 

 1,003 

 1,155 






Total equity


 51,639 

 51,937 

 48,906 






Total liabilities and equity


 76,080 

 79,885 

 78,445 



  


Interim Condensed Consolidated Income Statements for the




Nine month period ended

Three month period ended

Year ended


September 30

September 30

December 31


2009

2008

2009

2008

2008


Unaudited

Unaudited

Unaudited

Unaudited

Audited


$ thousands

$ thousands

$ thousands

$ thousands

$ thousands







Revenues from sales and services

 43,704 

 52,388 

 12,923 

 19,720 

 71,177 

Cost of sales and services

 23,512 

 28,734 

 7,785 

 10,397 

 37,185 







Gross profit

 20,192 

 23,654 

 5,138 

 9,323 

 33,992 

Research and development costs

 1,999 

 2,731 

 539 

 922 

 3,696 

Selling and marketing costs

 8,044 

 11,014 

 1,730 

 3,955 

 15,051 

General and administrative expenses

 2,600 

 2,730 

 844 

 981 

 3,971 

Other income 

(73)

(21)

 - 

(12)

Other expenses

 53 

 22 

 40 

 22 

 18 







 Results from operating activities

 7,569 

 7,178 

 1,985 

 3,443 

 11,268 







Financing expense

(666)

(2,673)

(115)

(1,733)

(4,327)

Financing income

 631 

 494 

 45 

 - 

 1,498 







Net financing expense

(35)

(2,179)

(70)

(1,733)

(2,829)







Profit before income tax

 7,534 

 4,999 

 1,915 

 1,710 

 8,439 

Income tax (expense) income

(643)

(480)

 25 

(121)

(842)







Profit for the period

 6,891 

 4,519 

 1,940 

 1,589 

 7,597 







Attributable to:






Equity holders of the Parent 

 6,172 

 4,240 

 1,716 

 1,360 

 7,065 

Minority interest

 719 

 279 

 224 

 229 

 532 







Profit for the period

 6,891 

 4,519 

 1,940 

 1,589 

 7,597 


 Earnings per share (in U.S. dollars)












Basic 

 0.191 

 0.126 

 0.053 

 0.040 

 0.209 







Diluted

 0.190 

 0.125 

 0.053 

 0.040 

 0.208 



Interim Condensed Consolidated Statement of Comprehensive Income for the





Nine month period ended

Three month period ended

Year ended


September 30

September 30

December 31


2009

2008

2009

2008

2008


Unaudited

Unaudited

Unaudited

Unaudited

Audited


$ thousands

$ thousands

$ thousands

$ thousands

$ thousands







Profit for the period

 6,891 

 4,519 

 1,940 

 1,589 

 7,597 







Adjustments arising from translation of financial statements for the period

 885 

 5,611 

 2,191 

(847)

 321 







 Total comprehensive income

 7,776 

 10,130 

 4,131 

 742 

 7,918 







Attributable to:












Equity holders of the Parent

 7,029 

 9,765 

 3,857 

 372 

 7,401 







Minority interest

 747 

 365 

 274 

 370 

 517 








 7,776 

 10,130 

 4,131 

 742 

 7,918 






Interim Condensed Statement of Changes in Equity




Attributable to equity holders of the Parent













Share

Share

Treasury

Retained

Translation 


Minority



capital

premium

shares

earnings

reserve 

Total

interest

Total equity


$ thousands

$ thousands

$ thousands

$ thousands

$ thousands

$ thousands

$ thousands

$ thousands

For the nine month period ended September 30, 2009









Balance as at January 1, 2009 (Audited)

 179 

 21,705 

(501)

 24,401 

 1,967 

 47,751 

 1,155 

 48,906 

Changes during 2009:









Profit for the period (Unaudited)

 - 

 - 

 - 

 6,172 

 - 

 6,172 

 719 

 6,891 

Adjustments arising from translation of financial statements for the period (Unaudited)

 - 

 - 

 - 

 - 

 857 

 857 

 28 

 885 

Total comprehensive income for the period

 - 

 - 

 - 

 6,172 

 857 

 7,029 

 747 

 7,776 

Acquisition of treasury shares (unaudited)

 - 

 - 

 - 

 - 

(1,826)

 - 

(1,826)

Dividend to equity holders (Unaudited)

 - 

 - 

 - 

(2,761)

 - 

(2,761)

 - 

(2,761)

Dividend paid to minority (Unaudited)

 - 

 - 

 - 

 - 

 - 

 - 

(556)

(556)

Share-based payment settled in shares (Unaudited)

 - 

 - 

 - 

 100 

 - 

 100 

 - 

 100 

Balance as at September 30, 2009 (Unaudited)

 179 

 21,705 

(2,327)

 27,912 

 2,824 

 50,293 

 1,346 

 51,639 










For the nine month period ended September 30, 2008









Balance as at January 1, 2008 (Unaudited)

 179 

 21,705 

(501)

 20,400 

 1,631 

 43,414 

 638 

 44,052 

Changes during 2008:









Profit for the period (Unaudited)

 - 

 - 

 - 

 4,240 

 - 

 4,240 

 279 

 4,519 

Adjustments arising from translation of financial statements for the period (Unaudited)

 - 

 - 

 - 

 - 

 5,525 

 5,525 

 86 

 5,611 

Total comprehensive income for the period

 - 

 - 

 - 

 4,240 

 5,525 

 9,765 

 365 

 10,130 

Dividend to equity holders (Unaudited)

 - 

 - 

 - 

(2,383)

 - 

(2,383)

 - 

(2,383)

Share based payment settled in shares (Unaudited)

 - 

 - 

 - 

 138 

 - 

 138 

 - 

 138 

Balance as at September 30, 2008 (Unaudited)

 179 

 21,705 

(501)

 22,395 

 7,156 

 50,934 

 1,003 

 51,937 










Year ended December 31, 2008









Balance as at January 1, 2008 (Audited)

 179 

 21,705 

(501)

 20,400 

 1,631 

 43,414 

 638 

 44,052 

Changes during 2008:









Profit for the year (Audited)

 - 

 - 

 - 

 7,065 

 - 

 7,065 

 532 

 7,597 

Adjustments arising from translation of financial statements for the year (Audited)

 - 

 - 

 - 

 - 

 336 

 336 

(15)

 321 

Total comprehensive income for the period

 - 

 - 

 - 

 7,065 

 336 

 7,401 

 517 

 7,918 

Dividend to equity holders (Audited)

 - 

 - 

 - 

(3,242)

 - 

(3,242)

 - 

(3,242)

Share based payment settled in shares (Audited)

 - 

 - 

 - 

 178 

 - 

 178 

 - 

 178 

Balance as at December 31, 2008

 179 

 21,705 

(501)

 24,401 

 1,967 

 47,751 

 1,155 

 48,906 


 

Interim Condensed Statement of Changes in Equity




Attributable to equity holders of the Parent













Share

Share

Treasury

Retained

Translation 


Minority



capital

premium

shares

earnings

reserve 

Total

interest

Total equity


$ thousands

$ thousands

$ thousands

$ thousands

$ thousands

$ thousands

$ thousands

$ thousands

For the three month period ended









 September 30, 2009









Balance as at July 1, 2009 (Unaudited)

 179 

 21,705 

(2,327)

 27,349 

 683 

 47,589 

 1,072 

 48,661 

Changes during 2009:









Profit for the period (Unaudited)

 - 

 - 

 - 

 1,716 

 - 

 1,716 

 224 

 1,940 

Adjustments arising from translation of financial statements for the period (Unaudited)

 - 

 - 

 - 

 - 

 2,141 

 2,141 

 50 

 2,191 

Total comprehensive income for the period

 - 

 - 

 - 

 1,716 

 2,141 

 3,857 

 274 

 4,131 

Dividend to equity holders (Unaudited)

 - 

 - 

 - 

(1,183)

 - 

(1,183)

 - 

(1,183)

Share-based payment settled in shares (Unaudited)

 - 

 - 

 - 

 30 

 - 

 30 

 - 

 30 

Balance as at September 30, 2009 (Unaudited)

 179 

 21,705 

(2,327)

 27,912 

 2,824 

 50,293 

 1,346 

 51,639 










For the three month period ended









 September 30, 2008

 179 

 21,705 

(501)

 20,996 

 8,144 

 50,523 

 633 

 51,156 

Balance as at July 1, 2008 (Unaudited)









Changes during 2008:









Profit for the period (Unaudited)

 - 

 - 

 - 

 1,360 

 - 

 1,360 

 229 

 1,589 

Adjustments arising from translation of financial statements for the period (Unaudited)

 - 

 - 

 - 

 - 

(988)

(988)

 141 

(847)

Total comprehensive income for the period

 - 

 - 

 - 

 1,360 

(988)

 372 

 370 

 742 










Share based payment settled in shares (Unaudited)

 - 

 - 

 - 

 39 

 - 

 39 

 - 

 39 

Balance as at September 30, 2008 (Unaudited)

 179 

 21,705 

(501)

 22,395 

 7,156 

 50,934 

 1,003 

 51,937 



Interim Condensed Consolidated Statements of Cash Flows for the




Nine month period ended

Three month period ended

Year ended


September 30

September 30

December 31


2009

2008

2009

2008

2008


$ thousands

$ thousands

$ thousands

$ thousands

$ thousands


Unaudited

Unaudited

Unaudited

Unaudited

Audited

Operating activities






Profit for the period

 6,891 

 4,519 

 1,940 

 1,589 

 7,597 

Depreciation

 673 

 776 

 233 

 263 

 972 

Amortization

 370 

 403 

 129 

 134 

 542 

Gain (loss) from sale of property and equipment, net

(11)

(12)

(1)

 4 

(11)

Decrease in value of securities, net

 14 

 2,320 

 - 

 1,690 

 3,172 

Increase (decrease) in value of long-term liabilities

 322 

(1,118)

(50)

 25 

(509)

Income tax expense (income)

 643 

 480 

(25)

 121 

 842 

Financing income, net

(260)

(541)

(149)

(167)

(758)

Share based payments

 100 

 138 

 30 

 39 

 178 







Operating gain before working capital changes

 8,742 

 6,965 

 2,107 

 3,698 

 12,025 







Changes in working capital:






(Increase) decrease in trade receivables

(2,215)

 11,752 

(449)

(1,412)

 7,758 

(Increase) decrease in other receivables

(274)

(1,248)

 20 

 302 

(917)

Decrease in inventories

 445 

 2,742 

 1,277 

 833 

 3,250 

Decrease in trade payables

(2,943)

(1,887)

(1,757)

(64)

(881)

Decrease in other payables

(2,912)

(7,143)

(1,287)

(1,464)

(4,572)

Changes in employee benefits

 118 

(16)

 92 

 38 

(301)


(7,781)

 4,200 

(2,104)

(1,767)

 4,337 







Income tax paid

(847)

(380)

(350)

(144)

(985)

Net cash provided by (used in) operating activities

 114 

 10,785 

(347)

 1,787 

 15,377 







Investing activities






Long-term loan paid from (granted to) Rapac group companies

(82)

 107 

(41)

(164)

 278 

Acquisition of property and equipment

(473)

(647)

(225)

(120)

(907)

Acquisition of other intangible assets

(1,219)

(1,398)

(434)

(460)

(1,823)

Investments in securities, net

(317)

(155)

(106)

(718)

(244)

Redemption of held to maturity investments

 123 

 - 

 123 

 - 

 - 

Proceeds from sale of property and equipment

 70 

 77 

 35 

 44 

 113 

Payment for investment in a subsidiary

(1,298)

(3,705)

 - 

 - 

(3,705)

Interest received

 396 

 541 

 170 

 167 

 705 













Net cash used in investing activities

(2,800)

(5,180)

(478)

(1,251)

(5,583)



Interim Condensed Consolidated Statements of Cash Flows for the (cont'd)




Nine month period ended

Three month period ended

Year ended


September 30

September 30

December 31


2009

2008

2009

2008

2008


$ thousands

$ thousands

$ thousands

$ thousands

$ thousands


Unaudited

Unaudited

Unaudited

Unaudited

Audited

Financing activities






Acquisition of treasury shares

(1,826)

 - 

 - 

 - 

Dividend paid

(1,594)

(2,383)

(1,135)

 - 

(3,242)

Dividend paid to minority

(556)

 - 

 - 

 - 

 - 

Short-term loan from Rapac group companies

 8 

 - 

 356 

(75)

 371 

Interest paid

(136)

 - 

(21)

 - 

(53)

Interest bearing loans and borrowings, net

 - 

 1,964 

(2)

 27 

 2,019 

Long-term financing lease

(35)

(71)

(12)

(36)

(98)







Net cash used in financing activities

(4,139)

(490)

(814)

(84)

(1,003)







Net increase (decrease) in cash and cash equivalents

(6,825)

 5,115 

(1,639)

 452 

 8,791 







Cash and cash equivalents at beginning of period

 17,060 

 8,673 

 11,170 

 14,850 

 8,673 







Translation differences in respect of cash balances

(258)

 1,225 

 446 

(289)

(404)







Cash and cash equivalents at end of period

 9,977 

 15,013 

 9,977 

 15,013 

 17,060 


 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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