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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mti Wireless Edge Ltd. | LSE:MWE | London | Ordinary Share | IL0010958762 | ORD ILS0.01 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -1.00 | -2.33% | 42.00 | 41.00 | 43.00 | 43.00 | 42.00 | 43.00 | 14,000 | 09:23:24 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Communications Equip, Nec | 45.63M | 4.05M | 0.0458 | 9.17 | 37.13M |
From Apr 2019 to Apr 2024
TIDMMWE
RNS Number : 8616Y
MTI Wireless Edge Limited
28 August 2018
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR)
28 August 2018
MTI Wireless Edge Ltd
("MTI" or the "Company")
Financial results for H1 2018
MTI Wireless Edge Ltd. (AIM: MWE), a market leader in the manufacture of flat panel antennas for fixed wireless broadband and a wireless irrigation solutions provider, today announces its unaudited results for the six months ended 30 June 2018.
As the merger (the "Merger") between the Company and MTI Computers and Software Services (1982) Ltd. ("MTIC") completed on 20 August 2018 the Company is presenting in this announcement the financial results as if the Merger was in effect as of the establishment of the Company. The financial statements for the six months ended 30 June 2018 (which are further below within this announcement) are for the Company on a pre-Merger basis (i.e. they do not contain any contribution from MTIC).
Highlights for the merged companies:
-- H1 2018 revenues increased by 3% year-on-year to $17.1m (H1 2017: $16.55m)
-- Q2 2018 revenues increased 12% year-on-year to $9.27m and 18% over Q1 2018 (Q1 2018:$7.84m, Q2 2017: $8.26m)
-- H1 2018 profit from operations decreased year-on-year by $0.2m to $1.06m mainly due to one-time Merger expenses of $0.16 million (2017: $1.26m)
-- Q2 profit from operations increased 16% year-on-year to $0.7m and doubled over Q1 2018 (Q1 2018: $0.35m, Q2 2017: $0.6m)
-- H1 2018 cash flow from operations increased 16% to $2.2m (2017: $1.9m)
Zvi Borovitz, Chairman of MTI Wireless, commented:
"We are very pleased to have completed the merger and are excited with the opportunities in each of our business segments. During the first six months of 2018 and especially in the second quarter we continued to see good progress. The general and administration costs in the six months include a one-time Merger cost of approximately $160,000. Going forward we will not only save these costs but expect to save an additional $100,000 annually due to the Merger.
During the first half of 2018, we continued to see good progress in meeting our internal goals in all areas of our business. In our wireless controller segment, via Mottech, we grew by 15% year-on-year and we continue to see opportunities to grow the business. In the antenna segment, we continue to see good demand in our military and Millimetre Wave solutions. While H1 revenue in this segment was 7% below last year, we believe that by the end of the year, we will also see growth in this segment. Our representation division had a small growth in revenue in the first half of the year, and given the design win achieved and the pipeline of opportunities, we expect to end this year with higher revenue growth. Our system engineering division continues to progress focusing on securing its growth for 2019 and beyond. Overall, in all segments, we have a strong belief that our growth will continue into 2019 and beyond".
Hot Features
Premium
A. Proforma interim consolidated statements of comprehensive income for the merged companies
Year ended
Six month period December
ended June 30, 31,
---------------------- ----------
2018 2017 2017
---------- ---------- ----------
U.S. $ in thousands
----------------------------------
Unaudited
---------------------- ----------
Revenues 17,112 16,550 34,653
Cost of sales 11,437 10,861 23,430
---------- ---------- ----------
Gross profit 5,675 5,689 11,223
Research and development expenses 561 461 927
Distribution expenses 2,037 2,083 4,085
General and administrative expenses 2,019 1,885 3,795
Loss (gain) from sale of property (3) - 6
---------- ---------- ----------
Profit from operations 1,061 1,260 2,410
Finance expense 227 115 249
Finance income 25 239 287
---------- ---------- ----------
Profit before income tax 859 1,384 2,448
Tax (income) expense (147) 183 440
---------- ---------- ----------
Profit 1,006 1,201 2,008
---------- ---------- ----------
Other comprehensive income (loss)
net of tax:
Items that will not be reclassified
to profit or loss:
Re-measurement of defined benefit
plans - - 53
---------- ---------- ----------
Items that may be reclassified to
profit or loss:
Adjustment arising from translation
of financial statements of foreign
operations (200) 31 61
---------- ---------- ----------
Total other comprehensive income (200) 31 114
---------- ---------- ----------
Total comprehensive income 806 1,232 2,122
========== ========== ==========
Profit attributable to:
Owners of the parent 1,004 1,140 1,949
Non-controlling interest 2 61 59
---------- ---------- ----------
1,006 1,201 2,008
========== ========== ==========
Total comprehensive income attributable
to:
Owners of the parent 804 1,171 2,063
Non-controlling interest 2 61 59
---------- ---------- ----------
806 1,232 2,122
========== ========== ==========
Earnings per share (dollars)
Basic 0.0117 0.0136 0.0231
========== ========== ==========
Diluted 0.0116 0.0134 0.0230
========== ========== ==========
B. Proforma interim consolidated statements of financial position of the merged companies
30.06.2018 30.06.2017 31.12.2017
---------- ---------- ----------
U.S. $ in thousands
----------------------------------
Unaudited
---------------------- ----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 3,946 5,690 3,508
Other current financial assets 2,031 - 2,011
Trade receivables 10,143 10,999 11,027
Other receivables 717 856 979
Current tax receivables 532 863 619
Inventories 4,746 4,849 5,481
---------- ---------- ----------
22,115 23,257 23,625
---------- ---------- ----------
NON-CURRENT ASSETS:
Long term prepaid expenses 35 49 45
Property, plant and equipment 4,229 4,272 4,211
Deferred tax assets 601 633 600
Intangible assets 940 1,051 995
---------- ---------- ----------
5,805 6,005 5,851
---------- ---------- ----------
Total assets 27,920 29,262 29,476
========== ========== ==========
30.06.2018 30.06.2017 31.12.2017
---------- ---------- ----------
U.S. $ In thousands
-----------------------------------
Unaudited
---------------------- -----------
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities and short term bank
credit and loans 836 1,082 869
Trade payables 3,878 4,360 4,186
Other accounts payables 2,225 2,487 2,520
Current tax payables 34 254 237
---------- ---------- -----------
6,973 8,183 7,812
---------- ---------- -----------
NON- CURRENT LIABILITIES:
Loans from banks, net of current maturities 547 1,345 955
Employee benefits, net 706 751 734
---------- ---------- -----------
1,253 2,096 1,689
---------- ---------- -----------
Total liabilities 8,226 10,279 9,501
---------- ---------- -----------
EQUITY
Equity attributable to owners of the
parent
Share capital 205 200 200
Additional paid-in capital 22,388 21,629 21,716
Capital reserve from share-based payment
transactions 361 337 352
Translation differences (95) 75 105
Retained earnings (3,550) (3,643) (2,781)
---------- ---------- -----------
19,309 18,598 19,592
Non-controlling interest 385 385 383
---------- ---------- -----------
Total equity 19,694 18,983 19,975
---------- ---------- -----------
Total equity and liabilities 27,920 29,262 29,476
========== ========== ===========
For further information please contact:
MTI Wireless Edge Ltd Dov Feiner, CEO Moni http://www.mtiwe.com/ Borovitz, Financial Director +972 3 900 8900 Nomad and Joint Broker Allenby Capital Limited Nick Naylor, Alex Brearley +44 20 3328 5656 Joint Broker Peterhouse Capital Limited Lucy Williams, Eran Zucker +44 20 7469 0930
About MTI Wireless Edge
Headquartered in Israel, MTI is a multi-faceted Group offering comprehensive technology solutions through four core divisions:
Antennas Division
MTI Wireless Edge is a world leader in the design, development and production of high quality, state-of-the-art, and cost effective antenna solutions including Smart Antennas, MIMO Antennas and Dual Polarity Antennas for wireless applications. MTI supplies antennas for both military and commercial markets from 100 KHz to 90 GHz.
Internationally recognized as a producer of commercial off-the-Shelf and custom-developed antenna solutions in a broad frequency range, MTI Wireless Edge addresses both commercial and military applications.
MTI supplies directional and omnidirectional antennas for outdoor and indoor deployments, including smart antennas for WiMAX, Broadband access, public safety, RFID, base stations and terminals for the utility market.
Military applications include a wide range of broadband, tactical and specialized communication antennas, antenna systems and DF arrays installed on numerous airborne, ground and naval, including submarine platforms worldwide.
Aerostat Operation Division
Via its system engineering division, the Group offers design and integration of aerostat operation systems along with the ongoing operation of Platform subsystems, SIGINT, RADAR, communication and observation systems.
Water Control & Management Division
Via its subsidiary, Mottech Water Solutions Ltd ("Mottech"), the Group provides high-end remote control solutions for water and irrigation applications based on Motorola's IRRInet state-of-the-art control, monitoring and communication technologies.
As Motorola's global prime-distributor Mottech serves its customers worldwide through its international subsidiaries and a global network of local distributors and representatives. With over 25 years of experience in providing customers with irrigation remote control and management, Mottech solutions ensure constant, reliable and accurate water usage, while reducing operational and maintenance costs. Mottech activities are focused in the market segments of agriculture, water distribution, municipal and commercial landscape as well as wastewater and storm-water reuse.
RF and Microwave Representative and Consultation Division
Via its subsidiary, MTI Summit Electronics Ltd. the group offers representative and expert consultation services specializing in RF and Microwave solutions and applications. It provides its services to international electronics suppliers operating in Israel, Eastern Europe, and Russia.
MTI WIRELESS EDGE LTD.
(An Israeli Corporation)
INTERIM CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
Year ended
Six month period ended December
June 30, 31,
-------------------------- -------------
2018 2017 2017
------------ ------------ -------------
U.S. $ in thousands
-----------------------------------------
Unaudited
--------------------------
Revenues 13,236 12,758 26,376
Cost of sales 8,233 7,896 16,828
------------ ------------ -------------
Gross profit 5,003 4,862 9,548
Research and development expenses 561 461 927
Distribution expenses 1,938 1,912 3,796
General and administrative expenses 1,704 1,610 3,216
loss from sale of property, plant
and equipment - - 6
------------ ------------ -------------
Profit from operations 800 879 1,603
Finance expenses 178 101 216
Finance income 25 205 242
------------ ------------ -------------
Profit before income tax 647 983 1,629
Income tax expenses (income) (203) 111 320
------------ ------------ -------------
Profit 850 872 1,309
------------ ------------ -------------
Other comprehensive income (loss)
net of tax:
Items that will not be reclassified
to profit or loss:
Re-measurement of defined benefit
plans - - 12
------------ ------------ -------------
Items that may be reclassified to
profit or loss:
Adjustment arising from translation
of financial statements of foreign
operations (200) 31 61
------------ ------------ -------------
Total other comprehensive income (200) 31 73
------------ ------------ -------------
Total comprehensive income 650 903 1,382
============ ============ =============
Profit attributable to:
Owners of the parent 848 811 1,250
Non-controlling interests 2 61 59
------------ ------------ -------------
850 872 1,309
============ ============ =============
Total comprehensive income attributable
to:
Owners of the parent 648 842 1,323
Non-controlling interests 2 61 59
------------ ------------ -------------
650 903 1,382
============ ============ =============
Earnings per share (dollars)
Basic 0.0156 0.0155 0.0236
============ ============ =============
Diluted 0.0154 0.0153 0.0234
============ ============ =============
Weighted average number of shares
outstanding
Basic 54,480,915 52,346,974 52,866,352
============ ============ =============
Diluted 54,936,165 53,167,096 53,309,196
============ ============ =============
The accompanying notes form an integral part of the financial statements.
MTI WIRELESS EDGE LTD.
(An Israeli Corporation)
INTERIM CONSOLIDATED STATEMENTS OF
CHANGES IN EQUITY
For the six month period ended June 30, 2018 (Unaudited):
Attributed to owners of the parent
------------------------------------------------------------------------
Capital
Reserve Total
for attributable
Additional share-based to owners
Share paid-in payment Translation Retained of the Non-controlling Total
capital capital transactions differences earnings parent interest equity
------- ---------- ------------ ----------- ---------- ------------ --------------- ---------
U.S. $ in thousands
Balance at
January 1, 2018 114 15,343 352 105 4,212 20,126 383 20,509
Changes during
the Six month
period
ended June 30,
2018:
Comprehensive
income
Profit for the
period - - - - 848 848 2 850
Other
comprehensive
loss
Translation
differences - - - (200) - (200) - (200)
------- ---------- ------------ ----------- ---------- ------------ --------------- ---------
Total
comprehensive
income (loss)
for the
period - - - (200) 848 648 2 650
Dividend 5 672 - - (1,073) (396) - (396)
Share based
payment - - 9 - - 9 - 9
------- ---------- ------------ ----------- ---------- ------------ --------------- ---------
Balance at
June 30,
2018 119 16,015 361 (95) 3,987 20,387 385 20,772
======= ========== ============ =========== ========== ============ =============== =========
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENTS OF
CHANGES IN EQUITY (CONT.)
For the six month period ended June 30, 2017 (Unaudited):
Attributed to owners of the parent
-----------------------------------------------------------------------
Capital
Reserve Total
for attributable
Additional share-based to owners
Share paid-in payment Translation Retained of the Non-controlling Total
capital capital transactions differences earnings parent interest equity
-------- ---------- ------------ ----------- -------- ------------ --------------- ---------
U.S. $ in thousands
Balance at
January 1, 2017 109 14,964 323 44 3,468 18,908 324 19,232
Changes during
the six month
period
ended June 30,
2017:
Comprehensive
income
Profit for the
period - - - - 811 811 61 872
Other
comprehensive
income
Translation
differences - - - 31 - 31 - 31
-------- ---------- ------------ ----------- -------- ------------ --------------- ---------
Total
comprehensive
income for
the
period - - - 31 811 842 61 903
Exercise of
options to
share capital (*) 14 (*) - - 14 - 14
Dividend 3 280 - - (518) (235) - (235)
Share based
payment - - 14 - - 14 - 14
-------- ---------- ------------ ----------- -------- ------------ --------------- ---------
Balance at
June 30,
2017 112 15,258 337 75 3,761 19,543 385 19,928
======== ========== ============ =========== ======== ============ =============== =========
(*) less than one thousand dollars
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENTS OF
CHANGES IN EQUITY (CONT.)
For the year ended December 31, 2017 :
Attributable to owners of the parent
-----------------------------------------------------------------------
Capital
Reserve Total
from attributable
Additional share-based to owners
Share paid-in payment Translation Retained of the Non-controlling Total
capital capital transactions differences earnings parent interest equity
-------- ---------- ------------ ----------- -------- ------------ --------------- ---------
U.S. $ in thousands
---------------------------------------------------------------------------------------------------
Balance as at January
1, 2017 109 14,964 323 44 3,468 18,908 324 19,232
Changes during 2017:
Comprehensive
income
Profit for the
year - - - - 1,250 1,250 59 1,309
Other
comprehensive
income
Re measurements on
defined benefit
plans - - - - 12 12 - 12
Translation
differences - - - 61 - 61 - 61
-------- ---------- ------------ ----------- -------- ------------ --------------- ---------
Total
comprehensive
income for the
year - - - 61 1,262 1,323 59 1,382
Exercise of
options to share
capital 2 99 (*) - - 101 - 101
Dividend 3 280 - - (518) (235) - (235)
Share based
payment - - 29 - - 29 - 29
-------- ---------- ------------ ----------- -------- ------------ --------------- ---------
Balance as at
December 31,
2017 114 15,343 352 105 4,212 20,126 383 20,509
======== ========== ============ =========== ======== ============ =============== =========
(*) less than one thousand dollars
The accompanying notes form an integral part of these financial statements.
MTI WIRELESS EDGE LTD.
(An Israeli Corporation)
INTERIM CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
30.06.2018 30.06.2017 31.12.2017
---------- ---------- ----------
U.S. $ in thousands
----------------------------------
Unaudited
---------------------- ----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 3,363 4,786 2,642
Other current financial assets 2,031 - 2,011
Trade receivables 9,115 9,525 8,988
Other receivables 556 792 850
Current tax receivables 283 586 360
Inventories 4,476 4,605 5,281
---------- ---------- ----------
19,824 20,294 20,132
---------- ---------- ----------
NON-CURRENT ASSETS:
Long term prepaid expenses 28 39 34
Property, plant and equipment 5,275 5,328 5,302
Investment property 598 619 609
Deferred tax assets 583 617 582
Intangible assets 159 267 212
Goodwill 573 573 573
---------- ---------- ----------
7,216 7,443 7,312
---------- ---------- ----------
Total assets 27,040 27,737 27,444
========== ========== ==========
The accompanying notes form an integral part of the financial statements.
MTI WIRELESS EDGE LTD.
(An Israeli Corporation)
INTERIM CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
30.06.2018 30.06.2017 31.12.2017
---------- ---------- ----------
U.S. $ In thousands
-----------------------------------
Unaudited
----------------------
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities and short term bank
credit and loans 817 1,018 848
Trade payables 2,606 2,621 2,239
Other accounts payables 1,871 2,247 2,322
Current tax payables 12 143 114
---------- ---------- -----------
5,306 6,029 5,523
---------- ---------- -----------
NON- CURRENT LIABILITIES:
Loans from banks, net of current maturities 509 1,321 935
Employee benefits, net 453 459 477
---------- ---------- -----------
962 1,780 1,412
---------- ---------- -----------
Total liabilities 6,268 7,809 6,935
---------- ---------- -----------
EQUITY
Equity attributable to owners of the parent
Share capital 119 112 114
Additional paid-in capital 16,015 15,258 15,343
Capital reserve from share-based payment
transactions 361 337 352
Translation differences (95) 75 105
Retained earnings 3,987 3,761 4,212
---------- ---------- -----------
20,387 19,543 20,126
Non-controlling interest 385 385 383
---------- ---------- -----------
Total equity 20,772 19,928 20,509
---------- ---------- -----------
Total equity and liabilities 27,040 27,737 27,444
========== ========== ===========
August 28, 2018
------------------------- --------------- ----------------- ------------------------
Date of approval Moshe Borovitz Dov Feiner Zvi Borovitz
of financial statements Chief Finance Chief Executive Non-executive Chairman
Director Officer of the Board
The accompanying notes form an integral part of the financial statements.
MTI WIRELESS EDGE LTD.
(An Israeli Corporation)
INTERIM CONSOLIDATED STATEMENTS OF
CASH FLOWS
Year ended
Six month period ended December
June 30, 31,
------------------------ ----------
2018 2017 2017
---------- ------------ -------------
U.S. $ in thousands
-------------------------------------
Unaudited
------------------------
Cash Flows from Operating Activities:
Profit for the period 850 872 1,309
Adjustments for:
Depreciation and amortization 296 326 637
Loss (gain) from investments in financial
assets (48) 133 -
Loss from sale of property, plant and equipment - - 6
Equity settled share-based payment expense 9 14 29
Finance expenses, net 36 56 162
Income tax expense (benefit) (203) 111 320
Changes in operating assets and liabilities:
Decrease (increase) in inventories 742 372 (269)
Increase in trade receivables (266) (1,409) (879)
Decrease (increase) in other accounts receivables
and prepaid expenses 294 (34) (88)
Increase (decrease) in trade and other
accounts payables (97) 700 396
Increase (decrease) in employee benefits,
net (24) 54 84
---------- ------------ -----------
Cash from operations 1,589 1,195 1,707
Interest received - - 22
Interest paid (36) (56) (109)
Income tax received (paid) 173 (215) (190)
---------- ------------ -----------
Net cash provided by operating activities 1,726 924 1,430
---------- ------------ -----------
The accompanying notes form an integral part of the financial statements.
INTERIM CONSOLIDATED STATEMENTS OF
CASH FLOWS (cont.)
Year ended
Six month period ended December
June 30, 31,
--------------------------------- -----------
2018 2017 2017
---------------------- --------- -----------
U.S. $ in thousands
-----------------------------------------------------
Unaudited
----------------------
Cash Flows From Investing Activities:
Purchase of investments in financial
assets, net - - (2,000)
Proceeds from sale of property, plant
and equipment - - 100
Purchase of property, plant and equipment (142) (119) (447)
---------------------- --------- -----------
Net cash used in investing activities (142) (119) (2,347)
---------------------- --------- -----------
Cash Flows From Financing Activities:
Exercise of share options - 14 101
Dividend (396) (235) (235)
Short term loan from banks - 166 -
Long term loan received from banks - - 60
Repayment of long-term loan from banks (429) (426) (829)
---------------------- --------- -----------
Net cash used in financing activities (825) (481) (903)
---------------------- --------- -----------
Increase (decrease) in cash and
cash equivalents during the period 759 324 (1,820)
Cash and cash equivalents
at the beginning of the period 2,642 4,428 4,428
Exchange differences on balances of
cash and
cash equivalents (38) 34 34
---------------------- --------- -----------
Cash and cash equivalents
at the end of the period 3,363 4,786 2,642
====================== ========= ===========
Appendix A - Non-cash transactions:
Year ended
Six month period ended December
June 30, 31,
------------------------ ----------
2018 2017 2017
----------- ----------- ----------
U.S. $ in thousands
------------------------------------
Unaudited
-------------------------
Purchase of property, plant and equipment
against trade payables 84 6 3
============ =========== ==========
Scrip dividend (Note 6 B) 677 283 283
============ =========== ==========
The accompanying notes form an integral part of the financial statements.
MTI WIRELESS EDGE LTD.
(An Israeli Corporation)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - General:
Corporate information:
M.T.I Wireless Edge Ltd. (hereafter - the "Company", or collectively with its subsidiaries, the "Group") is an Israeli corporation. The Company was incorporated under the Companies Act in Israel on December 30, 1998 as a wholly-owned subsidiary of M.T.I Computers and Software Services (1982) Ltd. (hereafter - the "Parent Company"), and commenced operations on July 1, 2000. Since March 2006, the Company's shares have been traded on the AIM market of the London Stock Exchange.
The formal address of the Company is 11 Hamelacha Street, Afek industrial Park, Rosh-Ha'Ayin, Israel.
The Company is engaged in the development, design, manufacture and marketing of antennas and accessories.
Via its subsidiary, Mottech Water solutions Ltd. (hereafter "Mottech"), the Company is also a leading provider of remote control solutions for water and irrigation applications based on Motorola's IRRInet state of the art control, monitoring and communication technologies.
Certain operational and administrative services are provided by the Parent Company.
Note 2 - Significant Accounting Policies:
The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in International Accounting Standard No. 34 ("Interim Financial Reporting").
The interim consolidated financial information set out above does not constitute full year-end accounts within the meaning of Israeli Companies Law. It has been prepared on the going concern basis in accordance with the recognition and measurement criteria of the International Financial Reporting Standards (IFRS). Statutory financial information for the financial year ended December 31, 2017 was approved by the board on February 15, 2018. The report of the auditors on those financial statements was unqualified.
The interim consolidated financial statements as of June 30, 2018 have not been audited.
The interim consolidated financial information should be read in conjunction with the annual financial statements as of December 31, 2017 and for the year then ended and with the notes thereto. The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2017 are applied consistently in these interim consolidated financial statements. except for the adoption of new standards effective as of 1 January 2018.
New IFRSs adopted in the period
1. IFRS 9 Financial Instruments
IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and Measurement for annual periods beginning on or after 1 January 2018, bringing together all six aspects of the accounting for financial instruments: classification and measurement; impairment; and hedge accounting.
The details of new significant accounting policies and the nature and effect of the changes to previous accounting policies are set out below:
(b) Classification and measurement
The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. Derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead, the hybrid financial instrument as a whole is assessed for classification.
A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at fair value through profit or loss ("FVTPL"):
- it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt investment is measured at fair value through other comprehensive income ("FVOCI") if it meets both of the following conditions and is not designated as at FVTPL:
- it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
- its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment's fair value in OCI. This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition.
The following accounting policies apply to the subsequent measurement of financial assets.
Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.
Financial assets at amortized cost: These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses (see b below). Interest income,
foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
Debt investments at FVOCI: These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On de-recognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at FVOCI: These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in OCI and are never reclassified to profit or loss.
The Company has implemented the classification and measurement requirements of IFRS 9 retrospectively on the basis of the facts and circumstances that existed as of January 1, 2018 by recognizing the cumulative effect of the retrospective application as an adjustment to the opening balance of retained earnings and other components of equity as of January 1, 2018.
(c) Impairment
IFRS 9 replaces the 'incurred loss' model in IAS 39 with an 'expected credit loss' (ECL) model. The new impairment model applies to financial assets measured at amortized cost, contract assets and debt investments at FVOCI, but not to investments in equity instruments. Under IFRS 9, credit losses are recognized earlier than under IAS 39.
Under IFRS 9, loss allowances are measured on either of the following bases:
- 12-month ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date; and
- lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial instrument.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company's historical experience and informed credit assessment and including forward-looking information.
The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of 'investment grade'.
The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.
Trade receivables
Exposures within each Company were segmented based on delinquency status, geographic region, age of relationship and type of product purchased.
Actual credit loss experience was adjusted by scalar factors to reflect differences between economic conditions during the period over which the historical data was collected, current conditions and the Company's view of economic conditions over the expected lives of the receivables.
Changes in accounting policies resulting from the adoption of IFRS 9 have been applied retrospectively, on the basis of the facts and circumstances that existed as of January 1, 2018 by recognizing the cumulative effect of the retrospective application as an adjustment to the opening balance of retained earnings and other components of equity as of January 1, 2018.
The adoption of IFRS 9 did not have an impact on the financial statements.
2. IFRS 15 Revenue from Contracts with Customers
IFRS 15 supersedes IAS 11 Construction Contracts, IAS 18 Revenue and related Interpretations and it applies to all revenue arising from contracts with customers, unless those contracts are in the scope of other standards. The core principle of IFRS 15 is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
IFRS 15 sets out a single revenue recognition model, according to which the entity shall recognize revenue in accordance with the said core principle by implementing a five-step model framework:
1. Identify the contract(s) with a customer. 2. Identify the performance obligations in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the performance obligations in the contract. 5. Recognize revenue when the entity satisfies a performance obligation.
Below are the significant accounting policies and judgments applied by the Company in recognizing revenue from customer contracts in detail according to the Company's main activities:
(a) Sale of goods
The Company's contracts with customers for the sale of goods generally include one performance obligation. The Company has concluded that revenue from sale of goods should be recognized at the point in time when control of the asset is transferred to the customer, generally on delivery of the equipment.
Variable consideration
Under IFRS 15, volume rebates give rise to variable consideration. The variable consideration is estimated at contract inception and constrained until the associated uncertainty is subsequently resolved. The application of the constraint on variable consideration increases the amount of revenue that will be deferred.
To estimate the variable consideration to which it will be entitled, the Company applied the 'most likely amount method' for contracts with a single volume threshold and the 'expected value method' for contracts with more than one volume threshold. The selected method that best predicts the amount of variable consideration was primarily driven by the number of volume thresholds contained in the contract. The Company then applies the requirements on constraining estimates of variable consideration.
Warranty obligations
The Company generally provides warranties for general repairs of defects that existed at the time of sale, as required by law. As such, most warranties are assurance-type warranties under IFRS 15, which the Company accounts for under IAS 37 Provisions, Contingent Liabilities and Contingent Assets, consistent with its practice prior to the adoption of IFRS 15.
Financing components
The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
(b) Rendering of services
Provided the amount of revenue can be measured reliably and it is probable that the Company will receive any consideration, revenue from services is recognized in the period in which they are rendered.
(c) Revenues from Construction Contracts
Revenues are reported by the "percentage of completion" method. The percentage of completion is determined by dividing actual completion costs incurred to date by the total completion costs anticipated.
When a loss from a contract is anticipated, a provision is made in the period in which it first becomes evident, for the entire loss anticipated, as assessed by the company's management.
The Company recognizes income from construction contracts over time, since the Company's performance does not create an asset with alternative use to the Company and the Company has the right to enforce payment for performance completed up to that date.
The payment terms in the projects are based on milestones set at the date of signing the contract and are based mainly on the rate of progress. For this reason, the Company is not expected to recognize assets in respect of contracts and liabilities in respect of contracts in significant amounts in relation to these contracts.
Causes of uncertainty in material estimates
Measuring the progress of long-term performance commitments - the Company is required to estimate the total cost of completing each project based on estimates of material costs, labor costs, subcontractor performance, and more.
First time application
The Company elected to apply IFRS 15 retrospectively for the first time by recognizing the cumulative effect of the retroactive application as an adjustment to the opening balance of retained earnings as at January 1, 2018.
The adoption of IFRS 15 did not have an impact on the financial statements.
Note 3 - REVENUES:
Year ended
Six month period ended December
June 30, 31,
------------------------ ------------------
2018 2017 2017
----------- ----------- ------------
U.S. $ in thousands
----------------------------------------------
Unaudited
------------------------
Revenues arises from:
Sale of goods 9,911 10,266 21,271
Rendering of services 1,334 1,175 2,492
Projects 1,991 1,317 2,613
----------- ----------- ------------
13,236 12,758 26,376
=========== =========== ============
Note 4 - operating SEGMENTS:
The following table's present revenue and profit information regarding the Group's operating segments for the six month period ended June 30, 2018 and 2017 respectively and for the year ended December 31, 2017.
Six month period ended June 30, 2018 (Unaudited)
Antennas Water Solutions Total
-------- --------------- ---------
U.S. $ in thousands
------------------------------------
Revenues
External 6,111 7,125 13,236
-------- --------------- ---------
Total 6,111 7,125 13,236
======== =============== =========
Segment profit 228 572 800
======== ===============
Finance expense, net 153
---------
Profit before income tax 647
=========
Other
Depreciation and amortization 267 29 296
======== =============== =========
Six month period ended June 30, 2017 (Unaudited)
Antennas Water Solutions Total
-------- --------------- ---------
U.S. $ in thousands
------------------------------------
Revenues
External 6,579 6,179 12,758
-------- --------------- ---------
Total 6,579 6,179 12,758
======== =============== =========
Segment profit 175 704 879
======== ===============
Finance income, net 104
---------
Profit before income tax 983
=========
Other
Depreciation and amortization 298 28 326
======== =============== =========
Year ended December 31, 2017
Antennas Water Solutions Total
--------- --------------- ---------
U.S. $ in thousands
-------------------------------------
Revenue
External 13,267 13,109 26,376
--------- --------------- ---------
Total 13,267 13,109 26,376
========= =============== =========
Segment profit 67 1,536 1,603
========= ===============
Unallocated corporate expenses
Finance expense, net 26
---------
Profit before income tax 1,629
=========
Other
Depreciation and amortization 586 51 637
========= =============== =========
Note 5 - TRANSACTIONS AND BALANCES WITH RELATED PARTIES:
The following transactions occurred with the Parent Company and other related parties:
Year ended
Six month period ended December
June 30, 31,
------------------------ ------------------
2018 2017 2017
----------- ----------- ------------
U.S. $ in thousands
----------------------------------------------
Unaudited
------------------------
Purchased Goods 102 103 252
Management Fee 231 221 498
Services Fee 143 130 259
Lease income (36) (36) (72)
Compensation of key management personnel of the Group:
Year ended
Six month period ended December
June 30, 31,
------------------------ ------------------
2018 2017 2017
----------- ----------- ------------
U.S. $ in thousands
----------------------------------------------
Unaudited
------------------------
Short-term employee benefits *) 471 417 920
=========== =========== ============
*) Including Management fees for the CEO, Directors, Executive Management and other related parties.
All Transactions were made at market value.
Balances with related parties:
30.06.2018 30.06.2017 31.12.2017
---------- ---------- ----------
U.S. $ in thousands
----------------------------------
Unaudited
---------------------- ----------
Other accounts payables 293 293 467
========== ========== ==========
Note 6 - SIGNIFICANT AND SUBSEQUENT EVENTS:
A. During March 2018 the Company announced that it is in preliminary discussions with its majority shareholder, MTI Computers & Software Services (1982) Ltd ("MTIC"), regarding a potential merger between the two companies (the "Proposed Transaction"). MTIC, whose shares are listed on the Tel Aviv Stock Exchange, currently holds 53.2% of the Company's issued ordinary shares. Following the announcement on March 2018, on May 1, 2018 the Company announced that it had entered into a merger agreement (the "Merger Agreement") with its majority shareholder, MTIC and the Company together being the "Merging Companies", according to which, and in accordance with the provisions of Sections 350-351 of the Israeli Companies Law, 5759-1999 (the "Companies Law"), as a court approved scheme of arrangement between the Company, MTIC and their shareholders (the "Scheme of Arrangement"), MTIC will be merged into the Company in a statutory merger, so that MTIC will be dissolved and all of its activities, assets and liabilities, subject to certain qualifications, will be transferred to the Company in consideration for the allotment of new ordinary shares of the Company and the transfer of MTIC's existing holdings in the Company, to all of MTIC's shareholders (the "Merger").
As consideration for the Merger, the Company will allocate to the shareholders of MTIC 31,600,436 new ordinary shares in the Company, subject to a Conversion Ratio Mechanism (as defined below). In addition, MTIC's existing holdings in the Company will also be transferred to all of the shareholders in MTIC, pro rata to their holdings of shares in MTIC.
On the date of record for the Merger the Company will allocate to the shareholders of MTIC (the "Date of Record for the Merger" and the "Shareholders of MTIC" respectively) 31,600,436 new ordinary shares in the Company, according to the Conversion Ratio (as defined below) as of the date of the Merger Agreement, subject to the Conversion Ratio Mechanism (as defined below) (the "Allotted Shares") and will transfer them, together with MTIC's Holdings in the Company (the "Sold Shares"), to all of the shareholders in MTIC, pro rata to their holdings of shares in MTIC on the Date of Record for the Merger, according to the Conversion Ratio. With respect to the Merger Agreement, the "Conversion Ratio" - a ratio of 5.2689055 Sold Shares for each share in MTIC as of the date of entry into the Merger Agreement, which has been determined according to a valuation of the business activities of MTIC and the Company, on the basis of the consolidated and audited financial statements for the year ended 31 December 2017 of each company as valued by an independent appraiser (the "Appraiser"), which is subject to updates, as necessary, according to the Conversion Ratio Mechanism (as defined below). According to the aforesaid valuation, which constitutes part of the Merger Agreement (the "Valuation"), the equity ratio as of 31 December 2017, between the value of MTIC excluding MTIC's holdings in the Company (approximately US$ 10.7 million as of 31 December 2017) when compared with the value of the Company (approximately US$18.8 million as at 31 December 2017) is approximately 1.75: in favor of the Company. Following completion of the Merger, assuming the Conversion Ratio is not adjusted in accordance with the Conversion Ratio Mechanism (5.26891) and provided none of the options granted by the Company are exercised, the issued share capital of the Company will be 87,038,724 ordinary shares.
The Merger was completed on August 20, 2018.
B. On April 5, 2018 the Company paid a dividend of US 2 cents per share totaling approximately US$ 396,000 and in addition 1,813,970 new ordinary shares were issued to qualifying shareholders that chose the scrip dividend alternative.
-ENDS-
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END
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