TIDMBVC
RNS Number : 5457K
BATM Advanced Communications Ld
29 August 2023
LEI: 213800FLQUB9J289RU66
29 August 2023
BATM Advanced Communications Limited
("BATM" or the "Group")
Interim Results
BATM (LSE: BVC; TASE: BVC), a leading provider of real-time
technologies for networking solutions and medical laboratory
systems, announces its interim results for the six months ended 30
June 202 3 .
Financial Summary*
$m H1 2023 H1 2022
Revenue 60.2 57.5
Gross profit 21.3 18.2
Gross margin 35.3% 31.6%
---------------------------------- -------- --------
Operating profit 2.2 1.6
EBITDA 4. 4 3.8
Profit before tax 2.3 1.0
---------------------------------- -------- --------
Basic earnings per share (cents) 0.39c 0.12c
---------------------------------- -------- --------
Cash from/(used in) operating
activities 0.5 (5.2)
Cash and short-term investments including investments in
deposits and other securities at 30 June 2023 were $41.9m (31
December 2022: $44.2m).
*Adjusted to exclude amortisation of intangible assets and
share-based payments. For further detail, see the Financial
Review
Strategic & Operational Summary
-- Achieved revenue growth in both the Networking & Cyber
and Bio-Medical divisions respectively and gross margin improvement
in all of the Group's business units
-- Completion of in-depth internal review of all business
operations to focus Group on its core business lines within the
Networking, Cyber and Diagnostics units and introduce
organisational improvements
Networking
-- Edgility edge computing platform:
o Five-year contract won from a leading provider of emergency
connectivity services in North America
o Rollout progressed with CityFibre and CEMEX
o Proof-of-concepts conducted with a number of potential
customers worldwide, including Tier 1 operators in Europe
o Established new partnership to increase sales and marketing
reach in EMEA
-- Carrier ethernet solutions:
o Strong growth reflecting increased delivery of 10G and 100G
solutions
o Development continued of new 10GE platform that is expected to
be launched later this year
Cyber
-- Won a $26m multi-year government defence contract for latest
high-performance cyber security solution
-- Development continued of advanced encryption solutions using
quantum key distribution and to expand the Group's offering into
further markets
Diagnostics
-- Sales of diagnostic products in line with the comparative
period when excluding COVID-19 contribution
-- ADOR Diagnostics progressed development of disruptive NATlab
molecular diagnostics platform, with in-hospital pre-clinical
trials commencing post period
Moti Nagar, Chief Executive Officer of BATM, said: "We are
pleased to announce a strong set of results for the first half of
2023. We achieved growth in all key financial parameters and
operational progress in each business unit. We have also undertaken
a comprehensive review of each business unit and their market
opportunity, and now have a clear focus on which entities are core
to the future success of the Group and that can drive a step change
in our financial performance.
"Looking ahead, we have entered the second half of the year in a
better position than at the same point last year, with sustained
revenue momentum and a higher backlog. We expect to deliver
year-on-year growth in Networking, with increased revenues from
both carrier ethernet and Edgility. Our cyber business revenues are
expected to be higher in the second half than in H1 as we ramp up
delivery of our large contract won earlier this year. Our
Bio-Medical division is also expected to continue to increase
sales. As a result, we expect to report year-on-year growth for
2023, in line with market expectations."
Enquiries
BATM Advanced Communications
Moti Nagar, Chief Executive Officer +972 9866 2525
-----------------
Ran Noy, Chief Financial Officer
-----------------
Shore Capital
-----------------
Mark Percy, Anita Ghanekar, James Thomas
(Corporate Advisory) +44 20 7408 4050
-----------------
Gracechurch Group
-----------------
Harry Chathli, Claire Norbury +44 20 4582 3500
-----------------
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Investor & Analyst Presentation
Moti Nagar, CEO, and Ran Noy, CFO, will be holding a webinar for
analysts and investors on Thursday 7 September 2023 at 1.00pm BST.
To register to participate or submit a question in advance, please
use the following link: https://forms.gle/9j9B24EPhk3dwX2s6 .
Forward-looking statements
This document contains forward-looking statements. Those
statements reflect the current opinions, evaluations and
estimations of the Group's management, and are based on the current
data regarding the Group's business as is detailed in this document
and in the Group's periodical, interim and immediate reports. The
Group does not undertake any obligation or make any representation
that actual results and events will be in line with those
statements, and stresses that they may differ materially from those
statements, due to changes in the Group's business, market,
competition, demand for the Group's products or services, general
economic factors or other factors that can influence the Group's
business and results, due to the risk factors that are detailed in
the Group's Annual Report, and due to information and factors that
are currently unknown to the Group's management and that, if known,
would affect the management's opinions, evaluations or estimations.
The Group will report the actual results and events according to
its legal, accounting and regulatory obligations, and does not
undertake any other obligation to report them or their deviations
from the forward-looking statements, or to update any of the
forward-looking statements in this document or to report that it is
not valid anymore.
Strategy Update
During the first half of the year, an in-depth process was
undertaken to assess the Group's business, strategy and markets.
Through this exercise, BATM renewed its strategic vision as a
global enterprise that intends to maximise its top assets while
providing high-quality solutions in growing markets with innovative
technology backed by strong IP and unique know-how. Accordingly,
the Networking, Cyber and Diagnostic lines of business have been
established as the Group's core areas of activity and prioritised
for resource allocation. Over time, the Group may add capability
through M&A to these core businesses, and divest other business
units where the Group can secure attractive terms. In the near
term, the Distribution and Eco-Med business lines will be
maintained, with the Group continuing to pursue growth in those
areas as appropriate.
Operational Summary
The Group delivered a strong performance in the first half of
the year, resulting in growth in the Networking & Cyber and
Bio-Medical divisions respectively. There were increased revenues
from both Carrier Ethernet and Edgility in Networking, while the
Group won a significant Cyber contract. In Diagnostics, sales were
in-line with the comparative period when excluding the contribution
to H1 2022 of products related to COVID-19. There was also an
increase in sales in the Distribution and Eco-Med units. In
addition, the Group continued its development work, including new
platforms due to be launched later this year in the Diagnostics and
Networking lines of business.
As a result of the strong performance in both divisions, the
Group delivered a significant improvement in EBITDA (excluding
share-based payments) to $4.4m (H1 2022: $3.8m) and generated cash
from operating activities of $0.5m compared with cash used in
operating activities of $5.2m in the first half of the previous
year.
Networking & Cyber Division
$m H1 2023 H1 2022
Revenue 13.3 13.1
Gross margin* 51.2% 40.1 %
-------------------------- -------- --------
Operating profit/(loss)* 0.1 (1. 3 )
* Adjusted to exclude amortisation of intangible assets and
share-based payments.
Revenue for the first half of the year in the Networking &
Cyber division increased. There was improvement in gross margin for
both the Networking unit and the Cyber unit respectively, as well
as on an aggregate basis, resulting in an increase in the
division's gross profit. This reflects the contribution to
Networking revenue from sales of Edgility and that revenue in the
Cyber unit was based on the provision of services, which are higher
margin. On an adjusted basis to exclude share-based payments, the
Networking & Cyber division generated an operating profit
compared with a loss for the first half of the previous year.
Networking
In the Networking unit, revenue increased by 34.4% reflecting
significant growth in both the Group's Edgility and carrier
ethernet business lines.
Edgility edge computing platform
During the period, the Group was awarded a five-year contract by
a leading provider of emergency connectivity services in North
America (the "Customer") for its Edgility platform for edge
computing. The Customer is using Edgility to deliver the
call-handling system for 911 Emergency Services and the 988
National Suicide Prevention & Mental Health Crisis Lifeline
across a major US state. This represents the first time Edgility is
being used for a government application and to support critical
public infrastructure. The Group is also exploring with the
Customer the potential to expand the use of Edgility to deliver the
emergency connectivity services in other US states as well as
outside the US.
The rollout of Edgility continued with CityFibre , the UK's
largest independent carrier-neutral Full Fibre platform, and CEMEX,
S.A.B, (NYSE: CX), a global construction materials company. The
current deployment with CityFibre is due to complete by the end of
this year, and the Group expects to receive further orders from
this customer. The deployment with CEMEX, which was accelerated
during the period, is due to complete in 2024, with CEMEX's sites
in a number of countries in Europe and Central and South America
having already gone live this year.
Edgility continued to undergo evaluation and proof-of-concepts
with leading network operators (including Tier 1 operators in
Europe), multi-service providers, Partners and systems integrators
worldwide. In further reflection of the increased recognition of
Edgility as a breakthrough solution, the Group was honoured that
Telco Systems was named in the Gartner Hype Cycle for Edge
Computing 2023 as a vendor of edge management and orchestration
solutions.
The Group continued to generate revenue through its partnership
with Advantech, a global leader in industrial IoT that is providing
Edgility pre-installed on a variety of its universal edge network
appliances. The Group also established a new collaboration with
Innovetech, which specialises in delivering digital transformation
projects for EMEA service providers, to provide a further
route-to-market.
Carrier ethernet solutions
There was strong growth in revenue from the Group's carrier
ethernet solutions. This was driven by the delivery of its
high-performance 10G and 100G products.
The Group continued to develop its product portfolio. In
particular, development continued on an upgraded, cost effective
10GE demarcation device that is expected to be launched later this
year.
Cyber
During the period, the Group was awarded a $26m contract, to be
delivered over a maximum of five years, from its long-standing
defence department customer for its latest high-performance cyber
security solution. Delivery under this contract is expected to ramp
in the second half of the year and into next year, with the Group
already manufacturing product under this contract with revenue to
be recognised upon delivery. As a result, the Cyber unit's revenue
during the period was lower than in the first half of 2022. The
Group continues to expect to receive further orders in the Cyber
unit in the second half of the year.
The Cyber unit also continued its development programme. This
includes solutions, such as quantum key distribution (QKD) and
post-quantum encryption, that are designed to address cyber risk in
the quantum computing era. It also includes solutions that will
allow BATM to expand its offer to new markets, such as further
government agency customers and the commercial market.
Bio-Medical Division
$m H1 2023 H1 2022
Revenue 46.9 44.4
Gross margin* 30.8% 2 9.0 %
------------------- -------- --------
Operating profit* 2.2 2. 9
* Adjusted to exclude amortisation of intangible assets and
share-based payments.
Revenue for the Bio-Medical division increased by 5.6% to $46.9m
(H1 2022: $44.4m), reflecting growth in the Eco-Med and
Distribution units, which more than offset a reduction in sales of
products relating to COVID-19.
There was improvement in gross margin for the Diagnostics,
Eco-Med and Distribution units respectively, as well as on an
aggregate basis. This was achieved despite the contribution to H1
2022 from higher margin COVID-19 products. The Bio-Medical division
generated an adjusted operating profit of $2.2 m for H1 2023
compared with $2.9 m for the first six months of the previous year,
which reflects an increase in sales & marketing expenses in
this financial period.
Diagnostics
Revenues in the Diagnostics unit in H1 2023 were level with H1
2022 when excluding the contribution to both periods from sales
related to COVID-19 products, and were lower on an absolute
basis.
The Group continued to progress its development and engineering
work on new reagents, kits and instrument s . In particular, the
Group is preparing to launch the MDXlab, a new molecular
diagnostics instrument based on the real-time PCR method. MDXlab is
a fully integrated sample-to-answer nucleic acid detection system.
Most of today's laboratories will either have two instruments to
undertake the different steps within the PCR process or they will
have a large integrated instrument, which is not suitable for
small- to medium-sized laboratories or point-of-care. MDXlab is
designed to overcome these limitations by offering an integrated,
compact, cost-effective solution.
ADOR Diagnostics ("ADOR"), an associate company of the Group
that is developing the disruptive NATlab molecular biology
platform, made strong progress during the period in finalising the
development of a new advanced biological process and upgraded
cartridge and instrument designs. Two further international patents
were also granted during the period. Post period, ADOR achieved a
key milestone with pre-clinical trials of the NATlab commencing at
a hospital in Israel, which are expected to conclude at the end of
the year.
Eco-Med
Revenue in the Eco-Med unit grew by 51.3% in H1 2023 over H1
2022 . This was based on increased sales of the unit's bio-waste
treatment products for medical settings, including completion of
the installation of its ISS-based solution at a hospital.
Distribution
Revenue in the Distribution unit increased by 11.1% in H1 2023
over the same prior year period. This was primarily due to greater
volume of sales as well as some price increases.
Financial Review
$m H1 2023 H1 2022
Revenue 60.2 57.5
Gross margin* 35.3% 31.6%
------------------- -------- --------
Operating profit* 2.2 1.6
* Adjusted to exclude amortisation of intangible assets and
share-based payments. For further detail, see the Financial
Review
Total Group revenue for the first half of 2023 increased to
$60.2m (2022: $57.5m), reflecting growth in both the Networking
& Cyber and Bio-Medical divisions .
On an adjusted basis to exclude the amortisation of intangible
assets, gross margin improved by 370 basis points to 35.3% (H1
2022: 31.6%). On a reported basis, gross margin increased to 34.9%
(H1 2022: 31.2%). This reflects improvement in the gross margin in
all of the Group's units.
Sales and marketing expenses were $9.5m (H1 2022: $8.0m), with
the increase reflecting activities to support the higher revenues
and continue to build capability to support future growth
opportunities. General and administrative expenses were $7.7m ( H1
2022: $5.4m). The increase reflects share-based payments, which are
non-cash, being $1. 2 m compared with $0.1m in H1 2022. R&D
expenses were $3.3m (H1 2022: $3.4m).
On an adjusted basis, to exclude the share-based payments
expense and amortisation of intangible assets (see Note 3),
operating profit grew by 36.3% to $2.2m (H1 2022: $1.6m) due to the
increased revenues and margin. On a reported basis, the growth was
offset by the increase in non-cash share-based payments resulting
in an operating profit of $0.6m compared with $1.3m for H1
2022.
As a result of the above, EBITDA (excluding share-based
payments) increased to $4. 4 m for H1 2023 compared with $3.8m for
H1 2022.
Net finance income was $0.1m compared with an expense of $0.6m
for H1 2022.
Profit before tax on an adjusted basis increased to $2.3m (H1
2022: $1.0m) and to $0.7m on a reported basis (H1 2022: $0.6m).
The Group recorded a $0.2m tax expense (H1 2022: $0.3m tax
income).
On an adjusted basis, net profit after tax attributable to
equity holders of the parent was $1.7m (H1 2022: $ 0.5 m) and $0.1m
on a reported basis (H1 2022: $0.1m ), primarily reflecting the tax
expense compared with a tax income in the previous year. As a
result, profit per share on an adjusted basis increased to 0.39c
(H1 2022: 0.12c) and to 0.02c (H1 2022: 0.03c) on a reported
basis.
As at 30 June 2023, inventory wa s $37.5m (31 December 2022:
$34.5m). Trade and other receivables were $3 4.2 m (31 December
2022: $36.5m) . Intangible assets and goodwill at 30 June 2023 were
$19.3m (31 December 2022: $18.5m).
Property, plant and equipment and investment property was $16.2m
(31 December 2022: $15.9m).
Trade and other payables was $43.3m (31 December 2022:
$46.3m).
Cash inflow from operating activities was $0.5m compared with
outflow of $5.2m in H1 2022. This significant improvement reflects
a decrease in working capital and a strong emphasis on
collections.
At 30 June 2023, the Group had cash and short-term investments
of $41.9m (31 December 2022: $44.2 m; 30 June 2022: $47.4m).
Outlook
BATM entered the second half of 2023 in a better position than
at the same point in the previous year, with sustained revenue
momentum and a higher backlog.
For full year 2023, the Group expects to deliver year-on-year
growth in Networking as revenue from the Group's carrier ethernet
and Edgility solutions continue to increase. Cyber revenues are
expected to be higher in the second half than in the first half as
the Group ramps up delivery of the large contract signed in H1
2023. The Group also remains confident of securing further cyber
orders in the near term. BATM expects Diagnostics to return to
growth in the second half compared with the first half, as it
delivers on orders received during the year. The Distribution and
Eco-Med businesses are also expected to deliver an increase in
revenue over the previous year. As a result, the Group is on track
to report year-on-year growth for FY 2023, in line with market
expectations.
The Group continues to have a strong balance sheet as well as
property and valuable IP. Accordingly , the Board remains confident
in the Group's prospects and looks forward to reporting on its
progress.
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED INCOME STATEMENTS
Six months ended 30
June
2023 2022
US$'000 US$'000
Unaudited Unaudited
Revenues 60,170 57,515
Cost of revenues 39,168 39,565
Gross profit 21,002 17,950
--------------- ---------------
Operating expenses
Sales and marketing expenses 9,483 7,980
General and administrative expenses 7,743 5,443
Research and development expenses 3,252 3,395
Other operating income (92) (119)
Total operating expenses 20,386 16,699
--------------- ---------------
Operating profit 616 1,251
Finance income 788 389
Finance expenses (678) (1,029)
Profit before tax 726 611
Income tax (expenses) (219) 347
Profit for the period before share of loss
of a joint venture
and associated companies 507 958
Share of loss of a joint venture and associated
companies (447) (288)
Profit for the period 60 670
Attributable to:
Owners of the Company 71 145
Non-controlling interests (11) 525
Profit for the period 60 670
Profit per share (in cents):
Basic 0.02 0.03
Diluted 0.02 0.03
-
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
Six months ended 30
June
2023 2022
US$'000 US$'000
Unaudited Unaudited
Profit for the period 60 670
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translating foreign
operations 7 75 ( 6,666 )
----------------- ---------------
775 ( 6 ,666 )
Items that will not be reclassified subsequently
to profit or loss:
Re-measurement of defined benefit obligation - 36
- 36
Total other comprehensive income (loss) for ( 6 ,630
the period 775 )
Total comprehensive income (loss) for the
period 835 (5,960)
================= ===============
Attributable to:
Owners of the Company 746 (6,766)
Non-controlling interests 89 806
----------------- ---------------
835 (5,960)
================= ===============
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 30 June 31 December
2023 2022 2022
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Current assets
Cash and cash equivalents 33,716 40,101 35,156
Trade and other receivables 34,204 34,678 36,495
Short-term investment in deposits
and other securities 8,175 7,263 9,011
Inventories 37,484 31,015 34,461
-------------------------- -------------------------- -----------------------
113,579 113,057 115,123
-------------------------- -------------------------- -----------------------
Non-current assets
Property, plant and equipment 15,621 16,962 15,309
Investment property 616 1,644 620
Right-of-use assets 5,003 5,650 5,461
Goodwill 12,572 11,129 12,583
Other intangible assets 6,713 5,237 5,948
Investment in joint venture and
associate 15,846 15,616 15,555
Investments carried at fair value 1,220 1,220 1,220
Deferred tax assets 3,380 3,356 3,362
-------------------------- -------------------------- -----------------------
60, 971 60, 814 60,058
-------------------------- -------------------------- -----------------------
Total assets 174,550 173,871 175,181
========================== ========================== =======================
Current liabilities
Short-term bank credit 5,625 4,731 2,235
Trade and other payables 43,284 36,562 46,256
Current maturities of lease
liabilities 1,904 1,866 1,984
Tax liabilities 318 5,291 818
-------------------------- -------------------------- -----------------------
51,131 48,450 51,293
-------------------------- -------------------------- -----------------------
Non-current liabilities
Long-term bank credit - 6 2,000
Long-term liabilities 3,411 3,221 3,472
Long-term lease liabilities 3,247 4,023 3,758
Deferred tax liabilities 85 175 120
Retirement benefit obligation 556 536 537
-------------------------- -------------------------- -----------------------
7,299 7,961 9,887
-------------------------- -------------------------- -----------------------
Total liabilities 58,430 56,411 61,180
-------------------------- -------------------------- -----------------------
Equity
Share capital 1,320 1,320 1,320
Share premium account 42 7,422 425, 944 426,138
Reserves ( 32,137 ) ( 26,933 ) (32,812)
Accumulated deficit ( 279,508 ) ( 279,707 ) (279,579)
-------------------------- -------------------------- -----------------------
Equity attributable to the:
Owners of the Company 117,097 120,624 115,067
Non-controlling interest ( 977 ) (3, 164 ) (1,066)
========================== ========================== =======================
Total equity 116,120 117,460 114,001
========================== ========================== =======================
Total equity and liabilities 174,550 173,871 175,181
========================== ========================== =======================
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the six months ended 30 June 2023
Attributable
Share to owners
Share premium Translation Other Accumulated of the Non-controlling Total
capital account reserve Reserve deficit Company interests equity
US$'000
-------------------------------------------------------------------------------------------------------------------
Balance as
at 1 January
2023 1,320 426,138 (26,039) (6,773) (279,579) 115,067 (1,066) 114,001
Profit for
the period - - - - 71 71 (11) 60
Exchange
differences
on
translating
foreign
operations - - 675 - - 675 100 775
------------- --------- ------------- --------------- ------------- ------------- ---------------- ---------
Total
comprehensive
income for
the period - - 675 - 71 746 89 835
Recognition
of
share-based
payments - 1,284 - - - 1,284 - 1,284
------------- --------- ------------- --------------- ------------- ------------- ---------------- ---------
Balance as
at 30 June
2023
(unaudited) 1,320 427,422 (25,364) (6,773) (279,508) 117,097 (977) 116,120
------------- --------- ------------- --------------- ------------- ------------- ---------------- ---------
For the six months ended 30 June 2022
Attributable
Share to owners
Share premium Translation Other Accumulated of the Non-controlling Total
capital account reserve reserve deficit Company interests equity
US$'000
--------------------------------------------------------------------------------------------------------------------
Balance as
at 1 January
2022 1,320 425,840 (19,337) (512) (279,888) 127,423 (3,289) 124,134
Profit for
the period - - - - 145 145 525 670
Re-measurement
of defined
benefit
obligation - - - - 36 36 - 36
Exchange
differences
on translating
foreign
operations - - (6,947) - - (6,947) 281 (6,666)
------------- --------- ------------- --------------- ------------- ------------- ---------------- ----------
Total
comprehensive
income (loss)
for the period - - (6,947) - 181 (6,766) 806 (5,960)
Dividend paid
to
non-controlling
interest - - - - - - (681) (681)
Share buy-back - - - (137) - (137) - (137)
Recognition
of share-based
payments - 104 - - - 104 - 104
------------- --------- ------------- --------------- ------------- ------------- ---------------- ----------
Balance as
at 30 June
2022
(unaudited) 1,320 425,944 (26,284) (649) (279,707) 120,624 (3,164) 117,460
------------- --------- ------------- --------------- ------------- ------------- ---------------- ----------
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended 30 June
2023 2022
US$'000 US$'000
Unaudited Unaudited
Net cash from (used in) operating activities
(Appendix A) 505 (5,198)
Investing activities
Purchases of property, plant and equipment (1,110) (1,481)
Increase of other intangible assets (1,000) (1,071)
Proceeds on disposal of deposits 1,182 158
Proceeds on disposal of financial assets
carried
at fair value through profit and loss - 1,021
Purchases of financial assets carried
at fair value
through profit and loss - (1,529)
Purchases of deposits - (4,659)
Deposit in escrow (686) -
Investment in joint venture, associated
companies and other (171) (4,180)
Interest received - 35
Proceeds on disposal of property, plant
and equipment 83 38
Net cash used in investing activities (1,702) (11,668)
Financing activities
Lease payment (1,195) (1,088)
Bank loan repayment - (3,666)
Bank loan received 1,160 5,678
Dividend paid - (4,300)
Dividend paid to NCI - (681)
Share buy-back - (137)
Net cash used in financing activities (35) (4,194)
Net decrease in cash and cash equivalents (1,232) (21,060)
Cash and cash equivalents at the beginning
of the period 35,156 65,331
Effects of exchange rate changes on the
balance
of cash held in foreign currencies (208) (4,170)
Cash and cash equivalents at the end
of the period 33,716 40,101
BATM ADVANCED COMMUNICATIONS LTD.
APPICES TO CONSOLIDATED STATEMENT OF CASH FLOWS
APPIX A
RECONCILIATION OF OPERATING PROFIT FOR THE PERIOD TO NET CASH
FROM/(USED IN) OPERATING ACTIVITIES
Six months ended 30
June
2023 2022
US$'000 US$'000
Unaudited Unaudited
Operating profit from operations 616 1,251
Adjustments for:
Amortisation of intangible assets 329 280
Depreciation of property, plant and equipment
and investment property 2, 161 2, 127
Capital (gain) loss of property, plant and equipment (29) 22
Gain from revaluation of investment carried
at fair value - (192)
Stock options granted to employees 1,284 104
Decrease in retirement benefit obligation - ( 43 )
Increase in provisions 34 19
----------- ---------------
Operating cash flow before movements in working
capital 4,396 3,568
Increase in inventory (3,023) (135)
Decrease in receivables 2,318 50
( 3,327
Decrease in payables ) ( 5,988 )
Effects of exchange rate changes on the balance ( 1,488
sheet 441 )
----------- ---------------
( 3,993
Cash from ( used in) operations 805 )
Income taxes paid ( 485) ( 733 )
Interest received (paid) 185 ( 472 )
----------- ---------------
( 5,198
Net cash from (used in) operating activities 505 )
=========== ===============
BATM ADVANCED COMMUNICATIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of preparation
The interim consolidated financial statements of the Group have
been prepared in conformity with International Accounting Standard
No. 34 "interim financial reporting".
In preparing these interim consolidated financial statements,
the Group implemented accounting policies, presentation principles
and calculation methods identical to those implemented in
preparation of its consolidated financial statements as of 31
December 2022 and for the period ended on that date. The condensed
interim financial statements should be read in conjunction with the
annual financial statements for the year ended 31 December 2022,
which have been prepared in accordance with IFRSs.
Note 2 - Profit per share
Profit per share is based on the weighted average number of
shares in issue for the period of 436,039,124 (H1 2022:
440,434,676). The number used for the calculation of the diluted
profit per share for the period (which includes the effect of
dilutive stock option plans) is 436,75 8 ,643 shares (H1 2022:
443,123,900).
Note 3 - Other alternative measures
1. Income statement adjustments - including (1) non-cash
share-based payments, and (2) the amortisation of intangible
assets.
Six months ended 30 Reported Share-based Amortisation Adjusted
June 2023 results payments of intangible results
assets
(Unaudited)
US$ thousands
Gross profit 21,002 - (261) 21,263
Gross margin (%) 34.9% - - 35.3%
Sales and marketing expenses 9,483 61 - 9,422
General and administration
expenses 7,743 1,206 - 6,537
Research and development
expenses 3,252 17 15 3,220
Other operating expenses
(income) (92) - 53 (145)
Operating profit 616 (1,284) (329) 2,229
Six months ended 30 Reported Share-based Amortisation Adjusted
June 2022 results payments of intangible results
assets
(Unaudited)
US$ thousands
Gross profit 17,950 - (207) 18,157
Gross margin (%) 31.2% - - 31.6%
General and administration
expenses 5,443 75 - 5,368
Research and development
expenses 3,395 29 - 3,366
Other operating expenses
(income) (119) - 73 (192)
Operating profit 1,251 (104) (280) 1,635
2. EBITDA measurement
Reported Adjusted
Six months ended Six months ended 30
30 June June
US$ in thousands 2023 2022 2023 2022
------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Operating profit 616 1,251 2,229 1,635
Amortisation of Intangible
assets 329 280 - -
Share-based payments 1 ,284 104 - -
Depreciation 2,161 2,127 2,161 2,127
EBITDA 4,390 3,762 4,390 3,762
Note 4 - Segments
Six months ended 30 June 2023
Networking Bio-Medical Unallocated Total
& Cyber
US$'000 US$'000 US$'000 US$'000
Revenues 13,288 46,882 - 60,170
Operating profit (1,389) 2,005 - 616
Net finance income 110
Profit before tax 726
Six months ended 30 June 2022
Networking Bio-Medical Unallocated Total
& Cyber
US$'000 US$'000 US$'000 US$'000
Revenues 13,104 44,411 - 57,515
Operating profit (1,491) 2,742 - 1,251
Net finance expense (640)
Profit before tax 611
Note 5 - Revenue from major products and services
The following is an analysis of the Group's revenue from
operations from its major products and services according to IFRS
15:
Six months ended 30
June
2023 2022
US$'000 US$'000
Unaudited Unaudited
Telecommunication products 10,033 7,355
Software services 3,255 5,750
Distribution of medical products 37,962 34,175
Diagnostic products 3,863 6,894
Eco-Med products 5,057 3, 341
60 ,170 57,515
Note 6 - Other
On 1 January 2023, the Company granted a total of 17,663,306
options over ordinary shares of 0.01 NIS each in the capital of the
Company ("Ordinary Shares") to the Chairman and CEO of the Company.
The options were granted under the BATM Advanced Communications
Ltd. Global Share Incentive Plan (2021) ("SIP (2021)") after
receiving the approval of shareholders at a general meeting. In May
2023, the Company granted 2,110,894 options over Ordinary Shares to
a senior employee under the SIP (2021) plan.
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END
IR SEAFWAEDSESA
(END) Dow Jones Newswires
August 29, 2023 02:00 ET (06:00 GMT)
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