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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Gilat | LSE:GLT | London | Ordinary Share | IL0010938228 | ORD ILS 0.01 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 87.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:9483C Gilat Satcom Limited 29 August 2007 GILAT SATCOM LTD. INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2007 Gilat Satcom Ltd. ("Gilat"; AIM symbol: GLT), the telecommunications operator specialising in the developing world, announces unaudited results for the 6 months ended 30 June 2007. Key points: +-----------------+--------+---------+------------+------------+------------+ |Figures in | Q1 2007| Q2 2007| 6 months| 6 months| Year ended| |US$000s | | | ended| ended| 31 December| | | | |30 June 2007|30 June 2006| 2006| +-----------------+--------+---------+------------+------------+------------+ |Revenues | 8,710| 9,038| 17,748| 16,760| 37,084| +-----------------+--------+---------+------------+------------+------------+ |Gross profit | 1,789| 1,917| 3,706| 4,865| 9,681| +-----------------+--------+---------+------------+------------+------------+ |Gross margin (%) | 20.5| 21.2| 20.9| 29.0| 26.1| +-----------------+--------+---------+------------+------------+------------+ |Operating profit | (798)| (139)| (937)| 931| 1,385| |(loss) | | | | | | +-----------------+--------+---------+------------+------------+------------+ |Operating margin | (9)| (2)| (5.3)| 5.6| 3.7| |(%) | | | | | | +-----------------+--------+---------+------------+------------+------------+ |EBITDA | 731| 1,402| 2,133| 3,746| 7,163| +-----------------+--------+---------+------------+------------+------------+ |Profit (loss) | (1,133)| (385)| (1,518)| 343| 252| |before tax | | | | | | +-----------------+--------+---------+------------+------------+------------+ Financial Highlights *Revenue for the first 6 months of 2007 increased 5.9% compared to the first 6 months of 2006. Revenues in the second quarter of 2007 were $9.0 million, compared to $8.7 million in Q2 2006 and compared to $8.7 in Q1 2007. *Gross profit in the second quarter was US$1.9 million compared to $1.8 million in Q1 2007 and to $2.4 million in Q2 2006. *Operating loss in Q2 2007 was US$141 thousands compared to operating loss of US$798 thousands in Q1 2007 and compared to operating profit of $271 thousands in Q2 2006. *EBITDA for the second quarter of 2007 was $1,402 thousands, compared to $731 thousands in Q1 2007 and compared to $1.7 million in the second quarter of 2006. *Net debt (Bank loans less cash) decreased to $3.6 million compared to $5.4 million in December 2006. *The first 6 months results reflect management's decision to write-off a debt owed by a large customer of approximately $1.1 million, whereas the related expenses have been fully accrued. Out of this amount $762 thousands are unrecognized revenues related to the first 6 months and additional $359 thousands are a provision for doubtful accounts related to the fourth quarter of 2006. Management expects no further expenses in connection with this transaction in future quarters. *Excluding the effect of the above mentioned debt, revenues for the 6 months were $18.5 million with 24% gross margin and operating profit of $184 thousands. CEO statement: As previously announced by the company there has been a change in its ownership, the Eurocom Group has acquired control over the company (through control over Satcom Systems, Gilat's parent company). The Eurocom Group is Israel's largest privately owned communications group with presence in the Israeli and international markets. Following the acquisition new board members and new CEO were appointed. Gilat's management and new board of directors are currently in the process of evaluating the company business strategy. Again, following the Acquistion, Gilat released a bank deposit of $3 million, reduced the interest rate on various loans and cancelled the financial covenants previously agreed with the bank. In addition, on 29 August 2007, the board of directors approved the replacement of another $2.6 million bank loan with a loan from Satcom Systems Ltd. The loan from Satcom Systems will bear the same interest rate and payment schedule as the bank loan, but will not include financial covenants. Gilat's new Board of Directors and management are confident in the success of the Company and its ability to achieve future goals for the benefit of its shareholders. Board Changes For more information about the Eurocom Group and the new board members, please see the Company's press announcement from 26 April 2007 and from 22 June 2007. Roy Hess, CEO For further information, please contact: Gilat Satcom Ltd.: +972 3 925 5015 Liat Helman, CFO Commitment-IR: +972 9 741 8866 Yael Nevat Seymour Pierce +44 20 7107 8000 Stuart Lane or John Depasquale Consolidated Profit & Loss Account Six months ended 30 June Three months ended 30 June 2 0 0 7 2 0 0 6 2 0 0 7 2 0 0 6 Revenues 17,748 16,760 9,038 8,712 Cost of revenues 14,042 11,895 7,121 6,318 Gross profit 3,706 4,865 1,917 2,394 Operating expenses: Selling and marketing 1,760 1,535 798 811 General and administrative 2,883 2,399 1,258 1,313 Total operating expenses 4,643 3,934 2,056 2,124 Profit (loss) from (937) 931 (139) 270 operations Financial income 78 166 62 32 Financial expenses (659) (754) (308) (297) Profit (loss) before tax (1,518) 343 (385) 5 Income Tax benefit 376 (*) (398) (53) (88) (expenses) Loss for the period (1,142) (*) (55) (438) (83) Basic loss per share (in (0.065) (*) (0.003) (0.025) (0.005) dollars) Diluted loss per share (in (0.065) (*) (0.003) (0.025) (0.005) dollars) Number of shares used in 17,692 17,692 17,692 17,692 computing basic earnings per share (in thousand) Number of shares used in 17,692 17,736 17,692 17,736 computing diluted earnings per share (in thousand) (*) Restated - see note 2.B Consolidated Balance Sheet 30 June 31 December 2 0 0 7 2 0 0 6 Unaudited Audited ASSETS CURRENT ASSETS Cash and cash equivalents 6,355 5,916 Short-term deposits 258 248 Trade receivables 1,038 2,315 Other receivables 1,061 (*) 803 Inventories 1,230 1,011 Total current assets 9,942 10,293 NON-CURRENT ASSETS Property and equipment 18,752 20,339 Intangible assets 6,803 7,430 Deferred income taxes 1,795 1,130 Other 381 536 Total non-current assets 27,731 29,435 37,673 39,728 LIABILITES AND EQUITY CURRENT LIABILITIES Current maturities of long term loans 2,600 2,600 Current maturities of long term leases 627 626 Trade accounts payable 4,829 3,863 Other payables and current liabilities 1,050 1,539 Total current liabilities 9,106 8,628 NON-CURRENT LIABILITIES Long-term credit from banks 7,625 8,925 Obligations under finance leases 6,970 7,080 Liabilities for severance pay, net 89 70 Total non-current liabilities 14,684 16,075 SHARE HOLDERS' EQUITY Share capital 39 39 Capital reserves 15,321 15,321 Accumulated deficit (1,477) (*) (335) Total equity 13,883 15,025 37,673 39,728 (*) Restated - see note 2.A Consolidated Statement of Cash Flows Six months ended 30 June 2 0 0 7 2 0 0 6 Cash flows from operating activities: Loss for the period (1,142) (*) (55) Adjustments to reconcile net profit to net cash provided by operating activities: Depreciation of property and equipment 3,070 2,815 and amortization of intangible assets Share based payment - 53 Appreciation of finance lease 203 173 Appreciation of bank deposits (10) (4) Decrease (Increase) in trade receivables 1,277 (844) Decrease (Increase) in other receivables (92) 385 Increase in inventories (219) (330) Increase in trade accounts payable 966 1,038 Increase (Decrease) in other payables and current (489) 767 liabilities Decrease (Increase) in deferred income taxes (398) (*) 71 Increase in liabilities for severance pay, net 19 13 Net cash provided by operating activities 3,185 4,082 Cash flows from investing activities: Purchases of property and equipment (928) (544) Purchases of intangible assets (206) - Repayment of a short-term bank deposit 3,000 - Investment in short-term bank deposit (3,000) - Net cash used in investing activities (1,134) (544) Cash flows from financing activities: Repayment of finance lease (312) - Repayments of loans from banks (1,300) (20,506) Receipt of long term loans from bank - 14,845 Net cash used in financing activities (1,612) (5,661) Increase (decrease) in cash and cash equivalents 439 (2,123) Cash and cash equivalents at the beginning of the period 5,916 6,987 Cash and cash equivalents at the end of the period 6,355 4,864 (*) Restated - see note 2.B Note 1 - Basis of Preparation The condensed financial statements have been prepared in conformity with International Accounting Standards (IAS) 34, interim Financial Reporting. Note 2 - Significant Accounting Policies The accounting policies adopted are consistent with those followed in the preparation of the Company's annual Financial Statements for the year ended 31 December 2006. The Company's consolidated interim financial statements have been prepared for the six months ended 30 June 2007. These financial statements should be read in conjunction with the Company's 2006 annual financial statements, including their accompanying notes. Adoption of new and revised Standards: * IAS 1 - Presentation of Financial Statements - Effective from 1 January 2007 (there were no influence on the Financial Statements). * IFRS 7 - Financial Instruments: Disclosures - Effective from 1 January 2007.(there were no influence on the Financial Statements). At the date of authorisation of these financial statements, the following Standards and Interpretations were in issue but not yet effective: * IFRS 8 - Operating Segments - Effective for annual periods beginning on or after 1 January 2009. * IFRIC 11 - IFRS 2 - Group and Treasury Share Transactions - Effective for annual periods beginning on or after 1 March 2007. * IFRIC 12 - Service Concession Arrangement - Effective for annual periods beginning on or after 1 January 2008. * IAS 23 - Borrowing costs - Effective for annual periods beginning on or after 1 January 2009. * IFRS 8 - Operating Segments - Effective for annual periods beginning on or after 1 January 2009. Restatement A. The financial statements as of 31 December 2006 were retroactively adjusted by way of restatement in order to reflect adjustments to currency appreciation of related party balance in the year 2005. The effect of the restatement on the financial statements as of 31 December 2006 is as follows: As of 31 December 2006 As Effect of Reported in Previously Restatement these Reported Financial Statements Balance sheet: Other receivables 946 (143) 803 Accumulated deficit (192) (143) (335) As of 1 January 2006 As Effect of Reported in Previously Restatement these Reported Financial Statements Balance sheet: Accumulated deficit (569) (143) (712) B. The financial statements as of 30 June 2006 were retroactively adjusted by way of restatement in order to reflect adjustments to income tax expenses for the six months ended 30 June 2006. The effect of the restatement on the financial statements as of 30 June 2006 is as follows: Six months ended 30 June 2006 As Effect of Reported in Previously Restatement these Reported Financial Statements Balance sheet: Income tax expenses (69) (329) (398) Profit (loss) for the period 274 (329) (55) Basic loss per share (in dollars) 0.015 (0.018) (0.003) Diluted loss per share (in dollars) 0.015 (0.018) (0.003) Note 3 - Exchange rates and linkage basis: Assets and liabilities in or linked to the Israeli currency, New Israeli Shekel ("NIS"), are included in the financial statements according to the representative exchange rate as published by the Bank of Israel at the balance sheet date. Data regarding exchange rates of NIS in relation to U.S. dollar are as follows: Exchange rate of one U.S. dollar 30 June 2007 4.249 30 June 2006 4.440 31 December 2006 4.225 Note 4 - Business Segments The communication services provided by the Company are divided into three main communication sectors: VSAT private network services, Internet backbone connectivity and International voice services. Segment information about these businesses is presented below: Six months ended 30 June 2007: VSAT Private Internet International Network Backbone Voice Services Connectivity Services Total REVENUE External sales 1,424 13,526 2,798 17,748 RESULT Segment result 517 1,168 326 Six months ended June 30, 2006: VSAT Private Internet International Network Backbone Voice Services Connectivity Services Total REVENUE External sales 1,402 12,858 2,500 16,760 RESULT Segment result 248 3,165 (25) Note 5 - Other Information In connection with note 12 to the annual financial statement: a. In April 2007, the Israeli Minister of Communications notified the Company that it intends to fine the Company and the Company has began an administrative process in which the Minister will hear the Company's representations. According to law, the maximum fine applicable is $70,000. The Company cannot asses at this point what the final amount to be paid, if any, will be. b. In January 2007, Gilat Satcom Nigeria Ltd (the Company's subsidiary) was granted a licence by the Nigerian Communication Commission for a consideration of $214,000. The licence is for a period of 10 years and it will be amortized over its estimated useful life. This license will allow Gilat Satcom Nigeria Ltd to operate as a local satellite communication services provider and to provide services to a wider range of customers. c. In February 2007, one of the managers of the Company was granted 176,923 options over unissued shares in the capital of the Company. Each option grants the right to purchase one Ordinary share of NIS 0.01 in the capital of the Company at an exercise price of 120p. Subject to his continued employment with the Company, 44% are fully vested at the date of grant and an additional 7% will vest at the end of each calendar quarter, until the end of 2008. All terms and conditions including price adjustments and dividend adjustments are in accordance with the Company's share option plan. The fair value of the options granted to the manager is $10,000 (calculated using the following data: share price 40p, expected volatility: 45%, risk free rate: 5%). d. The income statement for the 6 months ended 30 June 2007 reflects a provision for doubtful debts of $359,000. In addition, the Company did not recognise additional revenues of approximately $762,000 from the same customer. e. In May 2007, the Company decided to invest and purchase bandwidth capacity in the Eastern Africa Submarine Cable System project ("Eassy") through Western Indian Ocean Cable Company Limited ("WIOCC") which has been established by various parties and financed by global Development Financial Institutions. The investment will be made through Gilat Satcom Nigeria Ltd, the Company's wholly owned subsidiary. As one of the investing parties in this project, Gilat will purchase long-term bandwidth capacity enabling it to increase its penetration of the East African market for broadband internet services. Gilat intends to invest approximately US$2.3 million in the project. Gilat's investment will entitle it to ownership of approximately three and a half per cent. Of WIOCC's share capital. In addition, Gilat's investment will give it access to bandwidth capacity which may be used for broadband internet connectivity or other communication applications for the lifetime of the cable (which is expected to be at least 15 years), together with participation in the management of the project through a place on WIOCC's board of directors. An initial investment of US$1.3 million is due during the coming year and the balance of US$1 million will be payable between 2009 and2011. f. In connection with notes 12 i and 12 j to the annual financial statement: following the change of control in the Company in May 2007, the bank agreed to release a deposit of $3 million and reduce the interest rate on the loans. Furthermore, in August 2007 the bank agreed to cancel the financial covenants that had been agreed between the Company and the bank. This information is provided by RNS The company news service from the London Stock Exchange END IR ZKLFLDVBXBBQ
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