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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Metal-Tech | LSE:MTT | London | Ordinary Share | IL0010926751 | ORD ILS0.2 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 21.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMMTT
RNS Number : 9428O
Metal-Tech Ltd
26 September 2011
26 September 2011
Metal-Tech Ltd.
("Metal-Tech" or "the Company")
Results for the six months ended 30 June 2011
Metal-Tech, the producer and recycler of speciality metals such as Tungsten and Molybdenum, announces results for the six months ended 30 June 2011.
Financial Summary:
-- Revenue increased 40% to US$29.9m (H1 2010: US$21.3m), reflecting increased prices of Tungsten
-- Gross profit increased to US$3.9m in (H1 2010: US$0.3m loss), due to tight cost control measures and an increase in Tungsten prices
-- Net Profit of US$2.5m (H1 2010: US$5.4m loss)
-- Income incurred by deconsolidation of a subsidiary that ceased being consolidated, Shim-Technology Co. Ltd. ("Shim-Tech"), the Company's Mongolian subsidiary, of US$3.5m (H1 2010: US$1.4 loss) presented in discontinued operations
-- Operating expenses as a percentage of revenue reduced to 13% (H1 2010: 16%)
-- Bank debt was US$20.7m at 30 June 2011 (31 December 2010: US$21.9m after neutralisation of US$6.7m loan of non consolidated subsidiary)
-- Cash, cash deposits and restricted cash balance at 30 June 2011 were US$6.4m (31 December 2010: US$7.3m). The restricted cash at 30 June 2011 was US$5.6m (31 December 2010: US$5.1m)
-- Positive cash flow from operating activities US$1.5m (31 December 2010: negative US$1.0m)
Operational Summary:
-- Average selling Tungsten prices increased 64% compared with the same period last year
-- On 31 March 2011, a four-month industrial pilot phase for the validation of the Company's novel molybdenum extraction technology was completed satisfactorily under the supervision of a major publicly-traded international Chilean copper/molybdenum company. Negotiations regarding the implementation of the project have started, however it is currently difficult to assess if or when and what type of project will be implemented and any associated financial outcome to the Company
-- Tightly managed costs and cash flow to improve efficiency while maintaining strong focus on R&D in strategic areas
-- The Company's arbitration case against the Republic of Uzbekistan is ongoing, alleging that the country's treatment of Metal-Tech's 50% investment in Uzmetal Technology is unlawful
Commenting on the results, Aik Rosenberg, Executive Chairman and CEO of the Company, said: "We are pleased to report a period of continued progress in the first half of 2011. Strong demand for Tungsten led to sales of the metal at higher prices compared with the same period last year. The Company also remained committed to tightly managing its costs and finance whilst driving the business forward by increasing its recycling and production activities."
Enquiries:
Metal-Tech Ltd. +972 544 215454 Ariel (Aik) Rosenberg Panmure Gordon +44 20 7459 3600 Aubrey Powell Hannah Woodley / Charles Leigh-Pemberton Corfin Public Relations +44 20 7596 2860 Harry Chathli, Alexis Gore
Operating Review
Metal-Tech is pleased to report strong revenue growth and an improved operational performance in the first half of 2011. Revenue increased by 40% to US$29.9m (H1 2010: US$21.3m), reflecting increased sales prices. Tungsten prices were up 64% compared with the same period last year.
Metal-Tech achieved a gross profit of US$3.9m in H1 2011 compared with a gross loss of US$0.3m the first half of 2010, due to tight cost control measures and higher Tungsten prices.
As previously stated, the Company has taken steps to increase its recycling and production capacity in Israel by preparing and submitting an investment program to the Israel Ministry of Trade and Industry as well as seeking other international opportunities for co-production. The Israel Ministry of Trade has now approved the Company's investment program of US$10 million, which provides a grant of 24% from the investment. While a proportion of the investment has been made from Metal-Tech's available cash resources including operating cash flow, further finance will be required to complete the program. Such funding would assist Metal-Tech's plans to increase its production capacity.
Focus on R&D
Investment in R&D continued in the first half of 2011 to be directed to the validation of the Company's novel molybdenum extraction technology and is expected to yield attractive returns in the short to medium term.
As stated previously, the Company made a breakthrough on 31 March 2011 when the four-month industrial pilot phase for the validation of the novel molybdenum extraction technology was completed under the supervision of a major publicly-traded international Chilean coppermolybdenum company. The process and equipment were proven to operate continuously at high efficiency and with low operating expense, and produced high quality molybdenum and rhenium from low grade molybdenum concentrate.
This success may lead to the implementation of this technology by the Chilean company as well as others. However, although the parties are currently in negotiations regarding the implementation of the project, the Company does not have any information on when and what type of project will be implemented, and the financial impact of this development which may include an element of required funding by the Company.
Update on Mongolian Operations
As stated on 28 June 2011, the Company was informed that the court in Erdenet has declared Shim-Tech, the Company's Mongolian subsidiary, bankrupt and ordered relevant authorities to freeze its accounts and seize its assets. As a result, the Company is no longer in control of Shim-Tech and therefore ceased to consolidate the financial statements of Shim-Tech. As previously stated, Metal-Tech is taking all necessary actions in Mongolia to attain a fair and just result for the Company, including the submission of its claims as creditor of Shim-Tech.
Update on Uzbekistan Action
As announced in January 2010, Metal-Tech filed a Request for Arbitration against the Republic of Uzbekistan, alleging that the country's treatment of Metal-Tech's 50% investment in UzMetal-Technology, a joint venture to produce high-quality molybdenum products, is unlawful. The Request for Arbitration, filed with the International Centre for Settlement of Investment Disputes (ICSID) based in Washington, D.C., alleged Uzbekistan's breach of the Israel-Uzbekistan Bilateral Investment Treaty, as well as violations of various standards of treatment under international law and Uzbek legislation.
The current position is that an Arbitral Tribunal, comprising a nominee of the Republic of Uzbekistan, a nominee of the Company and an independent but mutually agreed nominee as the Chair, has been appointed. To date, both parties have filed their respective submissions before the Tribunal, including the Company's statement of claim. The parties have completed their respective documents and the Company submitted its final rejoinder, all in accordance with the procedural calendar. The Tribunal has already held sessions in which, inter alia, the agenda for the proceedings was presented and the process is expected to take up to 18 months to complete.
Financial Review
Income statement
Revenues for the six months ending 30 June 2011 were US$29.9m, an increase from US$21.3m in H1 2010. Profit attributed to equity holders was US$2.7m, down from a loss of US$5.4m in H1 2010. Net profit includes income incurred by discontinued operation of Shim-Technology Co. Ltd. (Shim-Tech), the Company's Mongolian subsidiary US$3.5m (H1 2010: US$1.4 loss).
Gross profit increased to US$3.9m in (H1 2010: US$0.3m loss) due to tight cost control measures and an increase in Tungsten prices.
Throughout the first half the Company continued to reduce operating expenses across all business functions. The Company maintained its focus on cash generation including the reduction of inventory levels. Inventory decreased by US$3.7m from US$21.1m at 31 December 2010.
General and Administrative expenses increased to US$2.1m in the first half of 2011 compared with US$1.7m in equivalent period in 2010. This increase was the result of several factors, including increased investment in new business development activity. The increase in this expenses (in NIS Currency) was due to decrease of dollar average rate and also due to increase in Legal expenses related to Uzbekistan arbitration.
Balance sheet statement
The Company reduced its debt levels with a reduction of bank debt from US$21.9m at 31 December 2011 to US$20.7m at 30 June 2011. Inventory decreased by $3.7m from $21.1m at 31 December 2010.
At 30 June 2011, the cash, cash equivalents and restricted cash balance of the Company was US$6.4m compared to US$7.3m at 31 December 2010 and US$8.2m at 30 June 2010. The Company believes this is sufficient to meet Metal-Tech's current financing costs and expected operating expenses. The Company will continue to prudently manage its affairs in order to maintain sufficient operating cash flow.
The Group has a positive working capital position at 30 June 2011 compared to working capital deficiency at 31 December 2010.
Outlook
Metal-Tech has entered the second half with continued solid demand for Tungsten and expects revenues for FY 2011 to be higher than in 2010. Global macro-economic conditions continue to impact the Tungsten industry, with demand outstripping supply and a high price which is expected to remain at the same level, resulting in increased revenues for the Company.
The Company continues to maintain tight control of cash and cost, whilst driving the business forward by increasing its recycling and production activities.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
Unaudited Audited ---------------- --------- December June 30, 31, ---------------- --------- 2011 2010 2010 ------- ------- --------- ASSETS CURRENT ASSETS: Cash and cash equivalents 790 4,655 2,243 Restricted cash 5,631 3,493 5,104 Trade receivables 11,281 10,110 11,076 Other accounts receivable 1,462 3,475 1,201 Inventories 17,441 22,398 21,131 ------- ------- --------- 36,605 44,131 40,755 ------- ------- --------- NON-CURRENT ASSETS: Property, plant and equipment 10,194 25,795 9,739 ------- ------- --------- Total assets 46,799 69,926 50,494 ======= ======= =========
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share data)
Unaudited Audited ------------------- --------- December June 30, 31, ------------------- --------- 2011 2010 2010 --------- -------- --------- LIABILITIES AND EQUITY CURRENT LIABILITIES: Short-term bank credit 4,354 3,609 3,762 Short-term loans and current maturities 15,973 11,203 17,636 Loan related to suspended plant - 6,757 6,787 Trade payables 7,128 8,359 8,620 Other trade payables related to suspended plant - 2,972 3,334 Income taxes payable 5,529 6,700 5,319 Other accounts payable 4,674 4,561 4,507 --------- -------- --------- 37,658 44,161 49,965 --------- -------- --------- NON-CURRENT LIABILITIES: Long-term loans 414 5,081 487 Employee benefit obligations 387 453 506 Other liabilities 436 - 468 Provision for losses in excess of investment in investee 69 - 69 --------- -------- --------- 1,306 5,534 1,530 --------- -------- --------- Total liabilities 38,964 49,695 51,495 --------- -------- --------- EQUITY: Equity attributable to the equity holders of the Company: Issued capital 2,399 2,399 2,399 Share premium 23,892 23,892 23,892 Other reserves 1,066 758 878 Accumulated deficit (19,522) (6,818) (22,249) --------- -------- --------- 7,835 20,231 4,920 Non- controlling interests - - (5,921) --------- -------- --------- Total equity (deficit) 7,835 20,231 (1,001) --------- -------- --------- Total liabilities and equity 46,799 69,926 50,494 ========= ======== =========
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
U.S. dollars in thousands (except share and per share data)
Unaudited Audited ---------------------------- ----------------------- Year ended December Six months ended June 30, 31, ---------------------------- ----------------------- 2011 2010 2010 ------------- ------------- ----------------------- Revenues 29,900 21,317 45,878 Cost of sales 26,035 (* 21,623 45,471 ------------- ------------- ----------------------- Gross profit (loss) 3,865 (306) 407 ------------- ------------- ----------------------- Research and development expenses ,net 473 415 778 Selling and marketing expenses 1,238 ( * 1,332 3,119 General and administrative expenses 2,078 1,632 3,798 ------------- ------------- ----------------------- Total operating expenses 3,789 3,379 7,695 ------------- ------------- ----------------------- Operating profit (loss) 76 (3,685) (7,288) Finance costs (1,260) (766) (1,962) Finance income 197 471 157 Other income (expense), net 20 (6) 3 Company's share of loss of company accounted for at equity - - (202) ------------- ------------- ----------------------- Loss before tax (967) (3,986) (9,292) Income tax benefit (expense) (4) - 2,201 ------------- ------------- ----------------------- loss from continuing operations (971) (3,986) (7,091) ------------- ------------- ----------------------- Income (loss) from discontinued operations, net 3,564 (1,414) (19,661) ------------- ------------- ----------------------- Total comprehensive income (loss) 2,593 (5,400) (26,752) ============= ============= ======================= Total comprehensive income (loss) attributable to: Equity holders of the Company 2,727 (5,400) (20,831) Minority interests (134) - (5,921) ------------- ------------- ----------------------- 2,593 (5,400) (26,752) ============= ============= ======================= Basic and diluted loss per share attributable to Ordinary equity holders of the Company from continuing operation (0.03) (0.10) (0.18) ============= ============= ======================= Basic and diluted loss per share attributable to Ordinary equity holders of the Company from discontinuing operation 0.1 (0.04) (0.36) ============= ============= ======================= Weighted average number of shares used in computing basic and diluted net loss per share attributable to Ordinary equity holders of the Company 38,376,923 38,376,923 38,376,923 ============= ============= ======================= *) Reclassified - see note 3
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands
Attributable to equity holders of the Company ------------------------------------------------------------ Non Share Share Other Accumulated controlling Total capital premium reserves deficit Total interest equity -------- -------- --------- ------------ ----------- ------------ ---------- Unaudited ---------------------------------------------------------------------------------------- Balance as of January 1, 2011 (Unaudited) 2,399 23,892 878 (22,249) 4,920 (5,921) (1,001) Total comprehensive loss - - - 2,727 2,727 (134) 2,593 Deconsolidation of company that ceased being consolidated - - - - - 6,055 6,055 Share based payment - - 188 - 188 - 188 -------- -------- --------- ------------ ----------- ------------ ---------- Balance as of June 30, 2011 2,399 23,892 1,066 (19,552) 7,835 - 7,835 ======== ======== ========= ============ =========== ============ ========== Attributable to equity holders of the Company ------------------------------------------------------------ Non Share Share Other Accumulated controlling Total capital premium reserves deficit Total interest equity -------- -------- ------------ ------------ ---------- Unaudited ---------------------------------------------------------------------------------------- Balance as of January 1, 2010 (Unaudited) 2,399 23,892 714 (1,418) 25,587 - 25,587 Total comprehensive loss - - - (5,400) (5,400) - (5,400) Share based payment 44 44 44 -------- -------- --------- ------------ ----------- ------------ ---------- Balance as of June 30, 2010 2,399 23,892 758 (6,818) 20,231 - 20,231 ======== ======== ========= ============ =========== ============ ========== Attributable to equity holders of the Company ------------------------------------------------------------ Non Share Share Other Retained controlling Total capital premium reserves earnings Total interest equity -------- -------- --------- ------------ ----------- ------------ ---------- Audited ---------------------------------------------------------------------------------------- Balance as of January 1, 2010 (Audited) 2,399 23,892 714 (1,418) 25,587 - 25,587 Total comprehensive loss - - - (20,831) (20,831) (5,921) (26,752) Share based payment - - 164 - 164 - 164 Balance as of December 31, 2010 2,399 23,892 878 (22,249) 4,920 (5,921) (1,001) ======== ======== ========= ============ =========== ============ ==========
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Unaudited Audited ------------------------ ----------- Year ended Six months ended June December 30, 31, ------------------------ ----------- 2011 2010 2010 ----------- ----------- ----------- Cash flows from operating activities: Net income (loss) 2,593 (5,400) (26,752) ----------- ----------- ----------- Adjustments to reconcile net loss to net cash provided by operating activities: Adjustments to the profit or loss items: Depreciation 558 515 1,099 Income (loss) from discontinued operations, net (3,564) 1,414 19,661 Gain on marketable securities - (14) (13) Capital gain from sale of property, plant and equipment - 3 (4) Employee benefit obligations (119) 148 201 Accrued interest and foreign exchange differences on short and long-term liabilities, net 529 26 1,078 Cost of share based payments 188 44 164 Company's share of loss of company accounted for at equity - - 202 Income tax expenses (benefit) 4 - (2,201) ----------- ----------- ----------- (2,404) 2,136 20,187 ----------- ----------- ----------- Changes in operating asset and liability items: Increase in trade receivables, net (205) (358) (1,324) Decrease in other accounts receivable (261) (1,540) (475) Decrease in inventory 3,690 4,141 4,696 Increase (decrease) in trade payables (1,415) 2,692 3,132 Increase in related parties, net - (25) (68) Increase (decrease) in other accounts payable (43) (395) 1,022 ----------- ----------- ----------- 1,766 4,515 6,983 ----------- ----------- ----------- Cash paid and received during the year for: Interest received 15 - 23 Interest paid (380) (319) (1,101) Income tax received - - 232 Income tax paid (7) (3) (97) ----------- ----------- ----------- (372) (322) (943) ----------- ----------- ----------- Net cash provided by (used in) continuing operating activities 1,583 929 (525) ----------- ----------- ----------- Net cash used in discontiuning operating activities (97) (225) (481) ----------- ----------- ----------- Net cash provided by (used in) operating activities 1,486 704 (1,006) ----------- ----------- -----------
The accompanying notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Unaudited Audited -------------------- ----------- Year ended Six months, ended December June 30, 31, -------------------- ----------- 2011 2010 2010 --------- --------- ----------- Cash flows from investing activities: Purchase of property, plant and equipment (1,013) (880) (2,138) Investment in company accounted for at equity - - (133) Participation in the purchase of property, plant and equipment - - 150 Proceeds from sale of property, plant and equipment - 7 7 Proceeds from of investments in previously consolidated subsidiaries (a) - - - Realization of marketable securities - 100 99 Increase in restricted cash (527) (10) (1,112) --------- --------- ----------- Net cash used in investing activities (1,540) (783) (3,127) --------- --------- ----------- Cash flows from financing activities: Proceeds (repayment) from short -term loans, net (615) (2,659) 6,002 Repayment of long-term loans (1,376) (1,759) (3,352) Proceeds of long-term loans - 5,507 - Increase (decrease) in short-term bank credit, net 592 (2,234) (2,153) --------- --------- ----------- Net cash used in financing activities (1,399) (1,145) 497 --------- --------- ----------- Decrease in cash and cash equivalents (1,453) (1,224) (3,636) Cash and cash equivalents at the beginning of the year 2,243 5,879 5,879 --------- --------- ----------- Cash and cash equivalents at the end of the period 790 4,655 2,243 ========= ========= =========== Unaudited Audited -------------------- ----------- Year ended Six months, ended December June 30, 31, -------------------- ----------- 2011 2010 2010 ------------ ------ ----------- a. Proceeds from investments in previously consolidated subsidiaries: Working capital (excluding cash and cash 10,692 - - equivalents) Non-current liabilities (597) - - Non-controlling interests (6,055) - - Gain from previously consolidated (4,040) - - subsidiaries ------------ ------ ----------- - - - ============ ====== ===========
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 1 - GENERAL:
The interim financial statement as of 30 June 2011 and for the six month period then ended (hereafter - the interim statements) were prepared in condensed form in accordance with IAS 34 - "Interim Financial Reporting".
The accounting policies applied in preparation of the interim financial statements are consistent with those used in the 2010 annual financial statements but have not been audited or reviewed by the auditors. Nevertheless, the interim statements do not include all the information and explanations required for annual financial statements, and should be read in conjunction with the 2010 annual financial statements.
Costs incurred unevenly during the year are brought forward or deferred, for interim reporting purposes if, and only if, such costs may be brought forward or deferred in the annual reporting.
NOTE 2 - REVENUES BY GEOGRAPHICAL SECTOR
Revenues classified by geographical destinations based on the customer location:
Unaudited Audited ------------------- ----------- Year ended Six month, ended December June 30, 31, ------------------- ----------- 2011 2010 2010 --------- -------- ----------- United States 10,561 10,472 21,017 Europe 11,589 5,722 12,382 South Africa 4,700 3,963 9,932 India 1,806 - - Japan 729 108 338 Israel 137 890 1,552 Others 378 162 657 --------- -------- ----------- 29,900 21,317 45,878 ========= ======== ===========
NOTE 3 - RECLASSIFICATION:
The Company determined that certain expenditures relating to transportation and shipping should be classified as selling and marketing expenses and not cost of sales in order to better reflect the nature of the expenditures. Accordingly comparative data for the six month period ended June 2010 amounting to $696 (thousand) has been reclassified.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 4 -INVESTMENTS IN PREVIOSLY CONSOLIDATED SUBSIDIARIES:
Shim Technology Co. Ltd. ("Shim-Tech"):
As stated on 28 June 2011, the Company was informed that the court in Erdenet (Mongolia) has declared Shim-Tech bankrupt and ordered to freeze its accounts and seize its assets. As a result the Company no longer controls Shim-Tech and therefore ceased to consolidate the financial statements of Shim-Tech. Metal-Tech is taking all necessary actions in Mongolia to attain a fair and just result for the Company, including the submission of its claims as creditor of Shim-Tech.
As a result of the deconsolidation of Shim-Tech, the Company recorded an income of $3,564 (1H 2010: loss of $ 1,414) (figures in thousands). This is presented in the accounts on a net basis as income (loss) from discontinued operations.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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