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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 : 3254J
Metal-Tech Ltd
06 August 2012
6 August 2012
Metal-Tech Ltd.
("Metal-Tech" or "the Company")
Results for the six months ended 30 June 2012
Metal-Tech, the producer and recycler of speciality metals such as Tungsten and Molybdenum, announces results for the half year ended 30 June 2012.
H1 2012 Financial Summary:
-- Revenue decreased by 32% to US$20.4m (H1 2011: US$29.9m)
-- Net loss of US$1.1m (H1 2011: US$2.6m profit, including US$3.6m of profit from discontinued operations)
-- Gross margin was 11% (H1 2011: 13%) -- Positive cash flow from operating activities of US$0.6m (H1 2011: positive US$1.5m) -- Operating expenses reduced to US$3.1m (H1 2011: US$3.8m) -- Loss per share from continuing operation of US$0.03 (H1 2011: US$0.03)
-- Cash, cash deposits and restricted cash balance at 30 June 2012 were US$3.4m (30 June 2011: US$6.4m; 31 December 2011: US$2.9m)
-- Significantly reduced debt position: bank debt balance at 30 June 2012 was US$16.4m (30 June 2011: US$20.7m; 31 December 2011: US$15.7m)
-- Funding support received from The Israeli Investment Center
H1 2012 Operational Summary:
-- Sales volumes decreased by approximately 49% compared to H1 2011 and 12% compared to H2 2011, mainly due to working capital restraints as well as lower demand for Tungsten
-- Cash flow is still tight and remains the barrier for further expansion. -- Recycling increased by 34% compared to H1 2011 and by 21% compared to H2 2011
-- The Company's arbitration case against the Republic of Uzbekistan continues with final briefs by the respondent and claimant expected in H2 2012
-- The Company's operational focus will remain the continued expansion of the production lines with a specific emphasis on the recycling plant, within the constraints of working capital
Commenting on the results, Aik Rosenberg, Executive Chairman and CEO of the Company, said: "The Company is progressing well with its strategy to increase recycling and maintaining this with improved commercial conduct thus minimising the effect of changing prices.
"Looking ahead, the uncertain macro-economic climate and with reduced demand for tungsten globally, the Company continues to exert tight cost control in all its operations. However, the cashflow constraints continue to restrict the Company's ability to increase production and recycling, management will seek to ease this pressure in order to return Metal-Tech to sustained growth and profitability."
Enquiries:
Metal-Tech Ltd. +972 544 215454 Ariel (Aik) Rosenberg Panmure Gordon +44 20 7459 3600 Fred Walsh Hannah Woodley, Charles Leigh-Pemberton Luther Pendragon +44 20 7618 9100 Harry Chathli, Alexis Gore
Operating Review
The first half of 2012 saw Metal-Tech's revenues and sales volumes hit by the global macro-economic conditions and a slowdown in demand for Tungsten. Revenue decreased by 32% to US$20.4m (H1 2011: US$29.9m), and the Company had a net loss of US1.1m (H1 2011: US$2.6m profit, including US$3.6m profit from discontinued operations).
As has been previously stated, Metal-Tech took 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 Israeli Investment Center approved the Company's investment program of US$7.6m, and the Directors believe will provide a grant of 20%, with the option of an additional 12%, of the investment costs. The Company has commenced implementing investment; however, 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
Metal-Tech continues to make investment in R&D. Its main focus is on new technologies for recycling Tungsten and improved water management in Tungsten recycling.
There is no progress to report on negotiations regarding the implementation of the previously announced project regarding extraction technology completed under the supervision of a major publicly-traded international Chilean coppermolybdenum company. 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 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.
Metal-Tech is seeking damages because it claims that Uzbekistan breached its obligations by denying Uzmetal Technology necessary inputs of molybdenum concentrate in mid-2006, thereby forcing the joint venture to become idle for lack of raw materials to process. The damage to Metal-Tech was exacerbated when Uzbekistan and its state-owned companies (which owned the other 50 percent of Uzmetal Technology) later forced the joint venture into bankruptcy and eventual liquidation.
The current position is that both parties have filed all their respective submissions before the Tribunal, in accordance with the procedural calendar. The hearings of the case took place in January 2012 and in May 2012. The parties have presented their respective briefs in June 2012, and supplementary briefs on 2 August 2012. Following this, further announcements will be made as and when new information becomes available; but the Company expects to receive the Tribunal's award on jurisdiction and on merits in approximately 6 months time.
Update on Mongolian Operations
There is no progress since the update provided in the Company's 2011 full year results statement. As stated on 28 June 2011, the Company was informed that the court in Erdenet has in May 2011 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. 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 prospective investment
As stated in March 2012, following the signing of a memorandum of understanding (MOU) for the potential investment from Technoplus to Metal-Tech in October 2011, the MOU with Technoplus and the "no-shop" period pursuant thereto, during which the Company and anyone acting on its behalf refrained from negotiating with third parties any transaction, which involves issuance of shares and/or options in the Company's equity, have expired.
Metal-Tech received a letter from Technoplus in March 2012, which included an allegation with respect to the Company's and other third parties liability for breach of the MOU. The Company strongly rejected any allegations that it has breached any of the conditions of the MOU and has not had any follow up from Technoplus.
Metal-Tech and Aik Rosenberg continues to hold discussions with other potential investors and will inform the market of any further developments as required. The Board maintains that any future fundraising will be utilised to support the growth of the Company, both through investments in the Company's production facilities, and facilitating working capital as required.
Financial Review
Income statement
Revenues for the six months ending 30 June 2012 were US$20.4m, compared with US$29.9m for the prior period. Loss attributable to equity holders was US$1.1m (H1 2011: US$2.7m profit, including US$3.6m income from discontinued operations). Metal-Tech achieved a gross profit of US$2.1m, compared with a gross profit of US$3.9m for H1 2011, due to lower sales volume.
Throughout H1 2012 the Company continued to reduce operating expenses across all business functions. The Company reduced its selling and marketing expenses by US$0.6m, compared with the prior period.
General and Administrative expenses remained on the same level of US$2.1m in H1 2012 compared with the prior period.
Balance sheet statement
The Company has significantly reduced its debt levels with a reduction of bank debt from US$20.7m at 30 June 2011 to US$16.4m at 30 June 2012.
At 30 June 2012, the cash, cash equivalents and restricted cash balance of the Company was US$3.4m compared to US$6.4m at 30 June 2011, and US$2.9m at 31 December 2011. 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.
Metal-Tech continues to invest in expansion of the recycling plant. The Company's investments in six months ending 30 June 2012 amounted to US$0.7m.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
Unaudited Audited ---------------- --------- December June 30, 31, ---------------- --------- 2012 2011 2011 ------- ------- --------- ASSETS CURRENT ASSETS: Cash and cash equivalents 990 790 354 Restricted cash 2,449 5,631 2,564 Trade receivables 5,213 11,281 5,604 Other accounts receivable 1,190 1,462 1,297 Inventories 22,092 17,441 23,401 ------- ------- --------- 31,934 36,605 33,220 ------- ------- --------- NON-CURRENT ASSETS: Trade receivables 321 - 620 Property, plant and equipment 10,329 10,194 10,173 ------- ------- --------- 10,650 10,194 10,793 ------- ------- --------- Total assets 42,584 46,799 44,013 ======= ======= =========
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
Unaudited Audited -------------------- --------- December June 30, 31, -------------------- --------- 2012 2011 2011 --------- --------- --------- LIABILITIES AND EQUITY CURRENT LIABILITIES: Short-term bank credit 4,295 4,354 2,702 Short-term loans and current maturities 11,670 15,973 12,616 Trade payables 9,195 7,128 10,015 Income taxes payable 2,857 5,529 3,000 Other accounts payable 4,752 4,674 4,773 --------- --------- --------- 32,769 37,658 33,106 --------- --------- --------- NON-CURRENT LIABILITIES: Long-term loans 447 414 414 Employee benefit obligations 223 387 214 Other liabilities 384 436 404 Provision for losses in excess of investment in investee - 69 - --------- --------- --------- 1,054 1,306 1,032 --------- --------- --------- Total liabilities 33,823 38,964 34,138 --------- --------- --------- 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 capital reserves 1,131 1,066 1,131 Capital reserves from transaction with controlling shareholders 96 - 96 Accumulated deficit (18,757) (19,522) (17,643) --------- --------- --------- Total equity 8,761 7,835 9,875 --------- --------- --------- Total liabilities and equity 42,584 46,799 44,013 ========= ========= =========
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
U.S. dollars in thousands (except share and per share data)
Unaudited Audited ---------------------------- ------------------------ Six months ended June 30, Year ended December 31, ---------------------------- ------------------------ 2012 2011 2011 ------------- ------------- ------------------------ Revenues 20,397 29,900 52,149 Cost of sales 18,232 26,035 45,256 ------------- ------------- ------------------------ Gross profit 2,165 3,865 6,893 ------------- ------------- ------------------------ Research and development expenses ,net 332 473 573 Selling and marketing expenses 659 1,238 2,101 General and administrative expenses 2,064 2,078 4,722 ------------- ------------- ------------------------ Total operating expenses 3,055 3,789 7,396 ------------- ------------- ------------------------ Operating profit (loss) (890) 76 (503) Finance costs (396) (1,260) (1,309) Finance income 236 197 783 Other income (expense), net (25) 20 - Company's share of loss of company accounted for at equity - - 69 ------------- ------------- ------------------------ Loss before tax (1,075) (967) (960) Income tax benefit (expense) (39) (4) 1,769 ------------- ------------- ------------------------ Income (loss) from continuing operations (1,114) (971) 809 Income from discontinued operations, net - 3,564 3,663 ------------- ------------- ------------------------ Net income (loss) (1,114) 2,593 4,472 Total comprehensive income (loss) (1,114) 2,593 4,472 ============= ============= ======================== Total comprehensive income (loss) attributable to: Equity holders of the Company (1,114) 2,727 4,606 Non-controlling interest - (134) (134) ------------- ------------- ------------------------ (1,114) 2,593 4,472 ============= ============= ======================== Net earnings (loss) per share attributable to equity holders of the company (in USD) Basic and diluted earnings (loss): Earnings (loss) from continuing operation (0.03) (0.03) 0.02 Earnings (loss) from discontinuing operation - 0.1 0.10 ------------- ------------- ------------------------ Net earnings (loss) (0.03) 0.07 0.12 ============= ============= ======================== 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 ============= ============= ========================
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands
Attributable to equity holders of the Company ---------------------------------------------------------------------------- Capital reserve Other from transaction Total Share Share capital with controlling Accumulated equity capital premium reserves shareholder deficit Total (deficit) --------- --------- ---------- ------------------ ------------ -------- ----------- Unaudited ----------------------------------------------------------------------------------------- Balance as of January 1, 2012 (Audited) 2,399 23,892 1,131 96 (17,643) 9,875 9,875 Total comprehensive loss - - - - (1,114) (1,114) (1,114) Balance as of June 30, 2012 2,399 23,892 1,131 96 (18,757) 8,761 8,761 ========= ========= ========== ================== ============ ======== =========== Attributable to equity holders of the Company ------------------------------------------------------ Share Share Other Accumulated Non controlling Total capital premium reserves deficit Total interest equity --------- --------- ------------ ---------------- -------- Unaudited ---------------------------------------------------------------------------------- Balance as of January 1, 2011 (Audited) 2,399 23,892 878 (22,249) 4,920 (5,921) (1,001) Total comprehensive income (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 ========= ========= ========== ============ ====== ================ ========
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
U.S. dollars in thousands
Attributable to equity holders of the Company --------------------------------------------------------------------- Capital reserve from transaction Other with Non Total Share Share capital controlling Accumulated controlling equity capital premium reserves shareholder deficit Total interest (deficit) --------- --------- ---------- ------------- ------------ ------ -------------- ----------- Audited ------------------------------------------------------------------------------------- ----------- Balance as of January 1, 2011 2,399 23,892 878 - (22,249) 4,920 (5,921) (1,001) Total comprehensive (income) loss - - - - 4,606 4,606 (134) 4,472 Share based payment - - 253 - - 253 - 253 Deconsolidation of subsidiary - - - - - - 6,055 6,055 Fair value of bank guarantees provided by controlling shareholder - - - 96 - 96 - 96 --------- --------- ---------- ------------- ------------ ------ -------------- ----------- Balance as of December 31, 2011 2,399 23,892 1,131 96 (17,643) 9,875 - 9,875 ========= ========= ========== ============= ============ ====== ============== ===========
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Unaudited Audited ------------------- ----------- Year ended Six months ended December June 30, 31, ------------------- ----------- 2012 2011 2011 --------- -------- ----------- Cash flows from operating activities: Net income (loss) (1,114) 2,593 4,472 --------- -------- ----------- Adjustments to reconcile net loss to net cash provided by operating activities: Adjustments to the profit or loss items: Depreciation 615 558 1,188 Income from discontinued operations, net - (3,564) (3,663) Employee benefit obligations 9 (119) (292) Accrued interest and foreign exchange differences on short and long-term liabilities, net 265 529 384 Share based payments - 188 253 Company's share of loss (income) of company accounted for at equity - - (69) Income tax expenses (benefit) 39 4 (1,769) --------- -------- ----------- 939 (2,404) (3,968) --------- -------- ----------- Changes in operating asset and liability items: Decrease (increase) in trade receivables, net 690 (205) 4,852 Decrease (increase) in other accounts receivable 107 (261) (52) Decrease (increase) in inventory 1,309 3,690 (2,270) Increase (decrease) in trade payables (820) (1,415) 1,505 Increase (decrease) in related parties, net (50) - 689 Increase (decrease) in other accounts payable 9 (43) (664) --------- -------- ----------- 1,245 1,766 4,060 --------- -------- ----------- Cash paid and received during the year for: Interest received 14 15 26 Interest paid (267) (380) (730) Income tax paid (183) (7) (163) --------- -------- ----------- (446) (372) (867) --------- -------- ----------- Net cash provided by (used in) continuing operating activities 624 1,583 3,697 --------- -------- ----------- Net cash used in discontinuing operating activities - (97) (268) --------- -------- ----------- Net cash provided by operating activities 624 1,486 3,429 --------- -------- -----------
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Unaudited Audited -------------------- ----------- Year ended Six months, ended December June 30, 31, -------------------- ----------- 2012 2011 2011 -------- ---------- ----------- Cash flows from investing activities: Purchase of property, plant and equipment (771) (1,013) (1,622) Increase in restricted cash 115 (527) 2,540 -------- ---------- ----------- Net cash provided by (used in) investing activities (656) (1,540) 918 -------- ---------- ----------- Cash flows from financing activities: Proceeds (repayment) from short -term loans, net (925) (615) 783 Repayment of long-term loans - (1,376) (5,959) Increase (decrease) in short-term bank credit, net 1,593 592 (1,060) -------- ---------- ----------- Net cash provided by (used in) financing activities 668 (1,399) (6,236) -------- ---------- ----------- Increase (decrease) in cash and cash equivalents 636 (1,453) (1,889) Cash and cash equivalents at the beginning of the year 354 2,243 2,243 -------- ---------- ----------- Cash and cash equivalents at the end of the period 990 790 354 ======== ========== ===========
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 1 - GENERAL:
The interim financial statement as of 30 June 2012 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 2011 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 2011 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 GEOGRAPHIC AREAS
Revenues classified by geographical destinations based on the customer location:
Unaudited Audited ------------------- ----------- Year ended Six month, ended December June 30, 31, ------------------- ----------- 2012 2011 2011 --------- -------- ----------- United States 9,527 10,561 19,134 Europe 6,462 11,589 22,781 South Africa 3,455 4,700 6,008 India 181 1,806 1,806 Japan 99 729 1,008 Israel 236 137 3,68 Others 437 378 1,044 --------- -------- ----------- 20,397 29,900 52,149 ========= ======== ===========
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 3 - METAL-TECH PERSONAL GUARANTTES :
In June 2012, Ariel (Aik) Rosenberg, Metal-Tech's Chairman and Chief Executive Officer, as the controlling shareholder, provided, at the Company's request and for no consideration, a personal guarantee in favor of Israeli Discount Bank Ltd. guaranteeing the Company's short-term loan and credit line in an amount of up to $500,000, as may renewed or extended in accordance with the Company's needs and subject to Aik's consent.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAPPDEEXAEFF
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