Amiad Water Systems Ltd – Final Results

Amiad Water Systems Ltd – Final Results

Amiad (AIM: AFS), a leading global producer of water treatment and filtration solutions, announces its final results for the year ended 31 December 2018.

Financial Summary

  • Revenue of $113.9m (2017: $112.3m)
  • Gross margin of 40.8% (2017: 39.5%)
  • Operating profit of $6.1m (2017: $4.6m)
  • Profit before tax of $4.8m (2017: $5.1m, which included exceptional gains from foreign currency hedging)
  • Fully diluted earnings per share of $0.10 (2017: $0.14)
  • Net debt at 31 December 2018 was $13.8m (30 June 2018: $10.8m) primarily reflecting an investment into inventories to support recent product launches
  • Cash and cash equivalents at 31 December 2018 were $13.5m (30 June 2018: $14.6m)

Operational Summary

  • Positive sales momentum:
  • Growth in revenue reflecting increased sales in Americas and APAC regions
  • Key geography of the US achieved strong return to growth, with sales increasing 27.3%
  • Industry business unit sales grew by 4.9%, with growth in Petrol, Petrochemical, Oil & Gas ("PPOG") and Municipal segments in most geographies
  • Increase in underlying Irrigation sales offset by reduction in revenue generated under the distribution agreement with Netafim, resulting in slight decrease in Irrigation business unit sales overall
  • Enhanced product offering and strengthened operations:
  • Successfully launched new range of irrigation products, which have been well received and contributed to Irrigation revenue in the second half of 2018
  • Completed integration of TEQUATIC™ PLUS Filter production line and employees, and implemented a focused the sales effort resulting strong pipeline and potential demand
  • Enhanced efficiency across the business with multiple actions, including in-house metal fabrication facility and increased automation in manufacturing
  • Gained 100% ownership of Amiad India subsidiary with acquisition of outstanding 40% shareholding from local partner

Dori Ivzori, Chief Executive Officer of Amiad, said: "This is a pleasing set of results with progress in most of our markets, including a return to growth in our key geography of the US. Our new Sigma series of irrigation products and the TEQUATIC™ PLUS Filter acquisition are performing well and receiving increasing demand. We continued to enhance our operational efficiency and benefitted from, among other measures, the contribution from our new in-house metal fabrication facility.

"Amiad entered 2019 in a stronger position than at the same point of the prior year with increased sales momentum and enhanced foundations. We are receiving strong demand for the new products, which are expected to make an important contribution to growth in their respective markets. This is supported by a solid backlog of projects to be delivered in 2019 in the Irrigation and Industry units. We also expect significant growth in the US. As a result, we expect to achieve good revenue growth in 2019 in line with market expectations, and are targeting an improvement in gross and operating margins. Consequently, we look to the future with confidence."

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