LEI: 213800FLQUB9J289RU66
12 March
2024
BATM Advanced Communications
Limited
("BATM" or the
"Group")
Full Year
Results
BATM (LSE: BVC; TASE: BVC), a
leading provider of real-time technologies for networking solutions
and medical laboratory systems, announces its preliminary results
for the year ended 31 December 2023.
Financial Highlights
$m
|
2023
|
2022
|
Revenue
|
122.8
|
116.1
|
Gross profit
|
39.9
|
38.0
|
Gross margin
|
32.5%
|
32.7%
|
Adj. operating profit*
|
5.0
|
4.0
|
Adj. EBITDA*
|
9.3
|
8.3
|
Adj. profit before tax*
|
4.8
|
2.8
|
Net cash from (used in) operating
activities
|
5.0
|
(2.8)
|
|
|
|
*Adjusted to exclude amortisation
of intangible assets and non-cash share-based payments. For further
detail, see the Financial Review
Strategic & Operational Highlights
· Completion of in-depth internal review of all business
operations to focus the Group on its core business lines within
networking, cyber and diagnostics, whilst introducing
organisational improvements
· Sales increased by 11.7% year-on-year when excluding
contribution from COVID-19 products
· Revenue and adjusted EBITDA growth driven by excellent
performance of the Cyber division
Networking
· Edgility edge computing platform:
o Two
five-year orders won from NGA 911 LLC ("NGA"), a leading provider
of emergency connectivity services in North America
o Rollout
continued to progress with CEMEX and CityFibre
o Proof-of-concepts conducted with a number of potential
customers worldwide, including Tier 1 operators
o Established new partnership to increase sales and marketing
reach in EMEA
o Launched new release of Edgility, with significantly upgraded
features
· Carrier ethernet solutions:
o Launched new 10GE platform, which is undergoing
proof-of-concepts that are expected to translate to orders in the
current year
o Promoting 100G solutions with TM-8104 and TM-8106 network
edge platforms to address demand for high-performance rapidly
deployable service demarcation devices with advanced features and
low cost per port
Cyber
o Won
multi-year orders totalling $32.4m from government defence
department customer
o Development continued of advanced encryption solutions,
including quantum key distribution integration and to expand the
Group's offering into further markets
Diagnostics
· In line with the new strategy, the Diagnostics division now
comprises all of the Group's diagnostics instrument and reagent
activities
· Sales of diagnostic products increased by 20.8% year-on-year
when excluding COVID-19 contribution, driven by expanded customer
base and product portfolio for distributed diagnostic
products
· Initiated sales of MDXlab, a new molecular diagnostics
instrument, towards the end of the year, which is receiving strong
interest
· Introduced a next-generation sequencing ("NGS") preparation
device with advanced capabilities for DNA and RNA
sequencing
· ADOR Diagnostics progressed development of disruptive NATlab
molecular diagnostics platform, with in-hospital pre-clinical
trials commencing during the year, and secured $7.5m
investment
Commenting on the results, Moti Nagar, Chief Executive
Officer of BATM, said:
"I am proud of what we achieved in
2023. Against a challenging macroeconomic backdrop, we delivered
growth in sales and adjusted EBITDA - including an outstanding
performance in our Cyber business. We launched several innovative
new products in Diagnostics and Networking that have been
well-received, whilst progressing development of potentially
game-changing solutions. Significantly, we undertook an in-depth
strategic review that resulted in the establishment of a new
strategy, which we began to implement in the second half of the
year. Our new strategy is focused on accelerating our activities
that build on our established areas of core expertise and which are
in scalable and growing markets. This involves enhancing how we
operate as a business, prioritising resource allocation and
potential M&A activity. We have already taken important steps
forward in this process and I am excited about the progress we will
make in 2024. Accordingly, and supported by our strong balance
sheet, we look to the future with confidence and look forward to
reporting on our progress."
Enquiries
BATM Advanced
Communications
|
|
Moti
Nagar, Chief Executive Officer
Ran Noy,
Chief Financial Officer
|
+972 9866
2525
|
|
|
|
|
Shore
Capital
|
|
Mark
Percy, Anita Ghanekar, James Thomas (Corporate Advisory)
|
+44 20
7408 4050
|
|
|
Gracechurch
Group
|
|
Harry
Chathli, Claire Norbury
|
+44 20
4582 3500
|
The information communicated in
this announcement is inside information for the purposes of Article
7 of Regulation 596/2014.
Investor & Analyst Presentation
Moti Nagar, CEO, and Ran Noy, CFO,
will be holding a webinar for analysts and investors on 13 March
2024 at 4.30pm GMT. To register to participate or submit a question
in advance, please use the following link:
https://forms.gle/4i8HW63eMGhvSJHj6.
Forward-looking
statements
This document contains forward-looking statements. Those
statements reflect the current opinions, evaluations and
estimations of the Group's management, and are based on the current
data regarding the Group's business as is detailed in this document
and in the Group's periodical, interim and immediate reports. The
Group does not undertake any obligation or make any representation
that actual results and events will be in line with those
statements, and stresses that they may differ materially from those
statements, due to changes in the Group's business, market,
competition, demand for the Group's products or services, general
economic factors or other factors that can influence the Group's
business and results, due to the risk factors that are detailed in
the Group's Annual Report, and due to information and factors that
are currently unknown to the Group's management and that, if known,
would affect the management's opinions, evaluations or estimations.
The Group will report the actual results and events according to
its legal, accounting and regulatory obligations, and does not
undertake any other obligation to report them or their deviations
from the forward-looking statements, or to update any of the
forward-looking statements in this document or to report that it is
not valid anymore.
Strategic Update
During the year, an in-depth
process was undertaken to assess the Group's business, strategy and
markets. Through this exercise, which concluded towards the end of
the first half, BATM renewed its strategic vision as a global
enterprise that intends to maximise its top assets while providing
high-quality solutions in growing markets with innovative
technology backed by strong IP and unique know-how. Accordingly,
the Networking, Cyber and Diagnostics lines of business have been
established as the Group's core areas of activity and prioritised
for resource allocation.
Over time, the Group intends to
add capability to its core activities through M&A, and to
divest other businesses where the Group can secure attractive
terms. The Group began exploring potential opportunities during the
second half of the year, albeit progress
was hindered by the impact of the prevalent geopolitical
circumstances and macroeconomic uncertainty. However, while there can be no guarantee that any transaction
will take place, the Board is confident that these strategic
processes will be accelerated in 2024.
The Group also began implementing
certain operational changes to align the business with the new
strategic vision, which has continued in the new financial year.
This includes adopting a reporting structure that is aligned with
the new strategy. The management team is seeking to enhance
efficiency across the Group by leveraging shared resources and
fostering collaboration between businesses that operate in similar
markets - with the latter being particularly applicable for the
Group's diagnostics businesses. The Group is in the process of
establishing further Group-wide corporate functions, with VPs of
Business Development and Human Resources being appointed during the
year and a VP of Group Operations joining the Group shortly. In
addition, the Group has commenced the process to expand and enhance
the sales teams within its core activities.
Against a challenging
macroeconomic backdrop and the loss of sales relating to COVID-19
products as the global pandemic subsided, the Group delivered a
strong performance in 2023. The growth in sales was driven by the
Cyber division, which won multi-year orders totalling over $32m.
There was an increase in revenue generated by Edgility, with the
Group also winning its first contract for Edgility to be used for a
government application in the US. In the Diagnostics division,
revenue increased when excluding the contribution from products
related to COVID-19, and was in line on an absolute basis. In
addition, the Group continued its development work, including new
products that were launched towards the end of the year in the
Diagnostics and Networking divisions and which are receiving strong
interest.
The Group significantly increased
cash generated from operating activities to $5.0m, which is
primarily attributable to the Group's core
activities, compared with cash used in operating activities
of $2.8m in the previous year.
$m
|
2023
|
2022
|
|
19.8
|
22.0
|
|
47.1%
|
45.9%
|
EBITDA*
|
1.7
|
0.4
|
* Adjusted to exclude amortisation
of intangible assets and non-cash share-based payments
The Networking division provides
high-performance connectivity solutions for the network edge,
including:
·
the innovative Edgility open edge software
platform that enables the deployment and life-cycle management of
apps, network functions and compute devices at the edge of the
network
·
a broad portfolio of carrier grade switching and
routing hardware and software products
The Group delivered a substantial
increase in EBITDA in the Networking division in 2023, despite a
reduction in revenue and cost pressures. This primarily reflects
lower operating expenses in 2023 due to measures implemented to
reduce costs.
Revenue was impacted by the global
slowdown in the telecommunications industry as economic uncertainty
and an inflationary environment resulted in organisations pausing
or delaying purchasing decisions. Revenue generated by Edgility
continued to increase, however revenue generated from carrier
ethernet products continued to account for the vast majority of the
Networking division revenue and was lower year-on-year. Despite the
cost price inflation, there was an improvement in gross margin in
the Networking division, supported by the greater contribution to
revenue from Edgility.
Edgility edge computing platform
The Group received two five-year
orders from NGA 911 LLC, a leading provider of emergency
connectivity services in North America, for its Edgility platform
for edge computing. NGA is using Edgility to deliver the
call-handling system for 911 Emergency Services and the 988
National Suicide Prevention & Mental Health Crisis Lifeline in
the US, representing the first time Edgility is being used for a
government application and to support critical public
infrastructure. The Group expects to receive further orders from
NGA as they continue the rollout of Edgility in the current areas
of deployment and expand to NGA's network in additional US States
and the Asia-Pacific region.
The rollout of Edgility with
CEMEX, S.A.B, (NYSE: CX), a global construction materials company,
progressed well during the year, and is on track to complete in the
current year. CEMEX has already deployed more than 1,000 end points
across sites in Europe and Central and South America. The rollout
continued with CityFibre, the UK's largest independent
carrier-neutral Full Fibre platform.
Edgility continued to undergo
evaluation and successful proof-of-concepts with leading network
operators (including Tier 1 operators in Europe and Latin America),
multi-service providers, partners and systems integrators
worldwide.
The Group continued to generate
revenue through its partnerships with Advantech, a global leader in
industrial IoT, and Lanner Electronics, a global provider of
network appliances and edge AI systems, that are providing Edgility
pre-installed on their universal edge network appliances. The Group
established a further route-to-market for Edgility via a new
collaboration with Innovetechs, which specialises in delivering
digital transformation projects for EMEA service
providers.
Towards the end of the year, the
Group launched a new release of Edgility, which marks a significant
upgrade to the Group's connected, intelligent edge platform. This
new release includes augmented high-availability, a more intuitive
user interface, integrated network functions, strengthened security
and enhanced operational efficiency. Edgility now supports
Kubernetes, which is an open-source container orchestration system
for automating software deployment, scaling and management. In
addition, the Group has introduced several Edgility connected edge
as a service packages, including a full managed service package, to
provide customers with the flexibility to choose the
relevant network appliances and mode of
operation.
Carrier ethernet solutions
The Group continued to evolve its
product portfolio, with a particular focus on developing an
upgraded, cost effective 10GE demarcation device that was launched
towards the end of the year. The Group is conducting a number of
proof-of-concepts with this device, which it expects to translate
into orders. The Group is also developing new products, which it
intends to launch during 2024, that will expand its portfolio to
support additional use cases.
$m
|
2023
|
2022
|
|
10.3
|
5.9
|
|
40.8%
|
40.6%
|
EBITDA*
|
2.4
|
0.6
|
* Adjusted to exclude amortisation
of intangible assets and non-cash share-based payments
The Cyber division provides
integrated hardware and software solutions for network encryption,
including hardware security modules (HSMs). It is a strategic
provider to large government agency clients, primarily involving
the security of mission critical infrastructure.
During the year, the Cyber
division performed strongly, with revenue growing by 76.6%. The
higher revenue combined with a slight improvement in gross margin
and with operating costs remaining broadly stable resulted in a
289.9% increase in adjusted EBITDA.
The Group secured new cyber orders
totalling $32.4m during the year from its
long-standing defence department customer.
This included receiving, at the beginning of the year,
a $26m order for its latest high-performance
encryption platform, which the Group began to deliver during the
year and is to be delivered over a maximum of five years. The Group
expects to receive further orders in the current year.
The Cyber division continued to
progress its development programme, which includes integration of
its platforms with quantum key distribution (QKD) and post-quantum
encryption algorithms to address cyber risk in the quantum
computing era. It also includes a new encryption offering that will
allow BATM to expand its solutions to new markets, such as other
government agency customers and the commercial markets.
$m
|
2023
|
2022
|
|
33.3
|
33.5
|
|
31.0%
|
31.9%
|
EBITDA*
|
3.0
|
3.3
|
* Adjusted to exclude amortisation
of intangible assets and non-cash share-based payments
The Diagnostics division is mainly
engaged in the sale and distribution of in vitro diagnostics
reagents and instruments, including the development and production
of proprietary products. Its proprietary products are focused on
molecular diagnostics by test type and infectious disease by
application area. This represents the implementation of the Group's
new strategy by bringing together its activities involving its
proprietary products and distribution of third party diagnostic
products. Through closer collaboration, the Group will be able to
leverage the strengths across the two areas of activity, such as
being able to apply for a larger number of tenders and offer a
comprehensive solution combining proprietary and third party
products.
Revenue in the Diagnostics
division increased by 20.8% over 2022 when excluding the
contribution to both years from sales related to COVID-19 products,
which accounted for an immaterial amount in 2023 and c. $7m in
2022, and was broadly in line on an absolute basis. In addition,
there was growth in the second half over the first half of the
year. The underlying growth was driven by the expansion of the
Group's customer base and product portfolio of distributed
diagnostic products.
The slight reduction in gross
margin primarily reflects the contribution to 2022 from COVID-19
products, which carry a higher margin. Operating expenses were
broadly maintained and, accordingly, EBITDA was lower due to the
slight decrease in revenue and gross margin.
The Group continued to progress
development and engineering work on new reagents, kits and
instruments. In particular, towards the end of the year, the Group
launched the MDXlab, a new molecular diagnostics instrument based
on the real-time PCR method. MDXlab is a fully integrated
sample-to-answer nucleic acid detection system. Most of today's
laboratories will either have two instruments to undertake the
different steps within the PCR process or they will have a large
integrated instrument, which is not suitable for small- to
medium-sized laboratories or point-of-care. MDXlab is designed to
overcome these limitations by offering an integrated, compact,
cost-effective solution. The Group is receiving strong interest in
this new instrument and has commenced generating revenue in the new
financial year.
Also towards the end of the year,
the Group introduced the EXTRAlab NGS Prep, which it plans to
commercially launch in the current year. This new molecular
diagnostics instrument expands the capabilities of the Group's
existing EXTRAlab with regards to NGS library preparation. NGS is
an advanced technology used for DNA and RNA sequencing and
variant/mutation detection, which is used for personalised
precision medicine, that is capable of sequencing a vast number of
genes in a short period of time. Library preparation, which is the
first phase of the NGS process, is often a manual procedure. The
Group's instrument automates this process, with the EXTRAlab NGS
Prep being able to make relevant self-adjustments.
The Group strengthened its
distribution operations by identifying new suppliers and deepening
its relationship with its existing partners with a view to gaining
exclusive contracts and advantageous commercial terms. The Group
also conducted a direct sales & marketing campaign to clients
that had been awarded government funding that management expects
will translate to applicable tenders for the Group in 2024 and
which it is confident of winning. As noted above, this would
include offering comprehensive solutions comprising the Group's
proprietary products as well as from third parties.
ADOR Diagnostics ("ADOR"), an
associate company of the Group that is developing the
disruptive NATlab molecular biology platform, made strong progress
during the year in finalising the development of a new advanced
biological process and upgraded cartridge and instrument designs,
and achieved a key milestone with the commencement of pre-clinical
trials of the NATlab at a hospital. This has generated valuable
insights, which the Group is now using to enhance its biological
process and improve the NATlab product. In addition, ADOR secured
an investment of $7.5m, of which the Group is contributing $3.5m,
which will be paid on the completion of milestones. Following this
investment, the Group's shareholding in ADOR will increase to
43.6%.
$m
|
2023
|
2022
|
|
59.3
|
54.8
|
|
27.9%
|
27.8%
|
EBITDA*
|
2.3
|
4.0
|
* Adjusted to exclude amortisation
of intangible assets and non-cash share-based payments
The Group's secondary (non-core)
activities include its businesses focused on:
·
the distribution of pharmaceutical and
environmental monitoring products, and the administering of
diagnostic tests
·
the production of eco-friendly pathogenic waste
treatment solutions for medical, agricultural and pharmaceutical
applications
Revenue generated by the Group's
secondary businesses grew by 8.3% year-on-year, driven by the
distribution of pharmaceutical products and test administration.
Gross margin was maintained, however, EBITDA was lower than the
previous year due to an increase in operating expenses primarily as
a result of inflationary cost pressures.
|
Adjusted*
|
|
|
Reported
|
$m
|
2023
|
2022
|
|
|
2023
|
2022
|
|
|
122.8
|
116.1
|
|
|
122.8
|
116.1
|
|
|
32.9%
|
33.0%
|
|
|
32.5%
|
32.7%
|
|
Operating
profit
|
5.0
|
4.0
|
|
|
1.6
|
3.1
|
|
EBITDA
|
9.3
|
8.3
|
|
|
6.8
|
8.0
|
|
|
|
|
|
|
|
|
|
| |
* Adjusted to exclude amortisation
of intangible assets and non-cash share-based payments
Total Group revenue for 2023
increased by 5.8% to $122.8m (2022: $116.1m). This
primarily reflects growth in the Cyber division and the Group's
distribution activities offsetting a reduction in the Networking
division. On an underlying basis, when excluding the contribution
to both years of sales from products related to COVID-19, total
Group revenue increased by 11.7% year-on-year and by 20.8% for the
Diagnostics division specifically.
Gross margin was broadly
maintained at 32.5% (2022: 32.7%), which reflects margin being
largely stable across the Group's divisions.
Sales and marketing expenses
were $19.1m (2022: $17.2m), with
the increase primarily reflecting activities to support the higher
revenues and the impact of cost inflation. General and administrative expenses
were $15.1m (2022: $13.0m). The increase reflects share-based
payments, which are non-cash. R&D
expenses were $5.1m (2022: $7.0m), which reflects
cost reduction and recognition of intangible assets. Other
operating income was $1.1m (2022: $2.4m), reflecting non-recurring
income in both years. As a result, total operating expenses were
$38.2m (2022: $34.8m).
On an adjusted basis, to exclude
the share-based payments expense and amortisation of intangible
assets (see Note 3), operating profit grew by 24.3%
to $5.0m (2022: $4.0m) due to the increased revenue
and stable gross margin. On a reported basis, the revenue and gross
profit growth was offset by the increase in total operating costs
resulting in an operating profit of $1.6m compared
with $3.1m for 2022.
As a result of the above, EBITDA
(excluding share-based payments) increased to $9.3m for 2023
compared with $8.3m for 2022.
Net finance expenses
were reduced to $0.2m (2022: $1.2m), primarily due to an increase in
finance income resulting from higher interest
rates.
Profit before tax on an adjusted
basis increased to $4.8m (2022: $2.8m) and
was $1.5m on a reported basis
(2022: $1.9m).
The Group recorded
a $0.8m tax expense (2022: $0.3m), which
reflects the receipt of a one-time tax credit in the prior
year.
On a reported basis,
profit after tax before share of loss of a joint venture and
associated companies was $0.6m (2022: $1.6m). After the share of loss of a joint venture and associated
companies, the Group recorded a loss for the year of $0.2m compared
with a profit for 2022 of $0.9m. As a result, there was a loss per
share of 0.04¢ (2022: 0.06¢ earnings per share).
As at 31 December 2023,
inventories were $38.2m (31 December 2022: $34.5m). Trade and
other receivables were $31.2m
(31 December 2022: $36.5m). Intangible assets and
goodwill at 31 December 2023 were $20.8m (31 December 2022: $18.5m).
Property, plant and equipment and
investment property was $16.7m
(31 December
2022: $15.9m).
Trade and other payables
were $41.7m (31
December 2022: $46.3m).
Cash inflow
from operating
activities was $5.0m, which was
primarily generated by the Group's core
activities, compared with an outflow
of $2.8m in 2022. This significant improvement primarily
reflects a strong emphasis on cost
management and collections.
Cash used in investing activities
was $6.1m (2022: $16.3m used in), which primarily reflects
investment in fixed and intangible assets and in
joint ventures and associated companies, including ADOR. Cash used
in financing activities was $2.2m (2022: $7.1m used in), which
consists of lease payments. As a result, the net decrease in cash
and cash equivalents was $3.3m compared with a decrease of $26.2m
in the prior year, with the improvement primarily reflecting tax
payments in 2022 relating to a business disposal along with
currency impacts and returns to shareholders.
At 31 December 2023, the Group had
cash and short-term investments of $40.8m (31 December
2022: $44.2m).
The Group entered 2024 with
positive momentum in its core activities, a new focused strategy
designed to deliver sustainable, long-term growth and a strong
balance sheet.
Having begun to implement the new
strategy in the second half of 2023, the Board intends to ramp up
the process in the current year. The Group plans to focus its
resources on its core activities, including building a strong
global sales team. In addition, while there is no guarantee any
transaction will occur, the Group intends to explore M&A
opportunities to support the Group's core activities or divestment
of secondary businesses. Accordingly, the Group intends to invest
to establish a solid infrastructure that will provide the
foundations for sustainable growth.
With regards to the core
activities specifically, the Group has a significant backlog in the
Cyber division to be delivered in the
current year and beyond. In addition, the Group is focused on the
development of its new encryption product that will enable the
Cyber division to penetrate new markets. The Group is receiving
strong interest in its new diagnostic instruments, MDXlab and
EXTRAlab NGS Prep, which it expects to make a material contribution
to growth in the Diagnostic division
alongside a sustained increase in sales of distributed diagnostic
products. In the Networking division, the
Group expects growth to be driven by the actions that it is taking
to enhance its sales function and other operational
infrastructure.
As a result, the Board remains
confident in the Group's prospects and looks forward to reporting
on its progress.
BATM ADVANCED COMMUNICATIONS
LTD.
CONSOLIDATED STATEMENTS OF
PROFIT OR LOSS
|
Year ended
31
December
|
|
2023
|
|
2022
|
|
US$'000
|
|
US$'000
|
|
Unaudited
|
|
Audited
|
Revenues
|
122,830
|
|
116,123
|
|
|
|
|
Cost of
revenues
|
82,940
|
|
78,165
|
|
|
|
|
Gross
profit
|
39,890
|
|
37,958
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Sales and
marketing expenses
|
19,130
|
|
17,209
|
|
|
|
|
General
and administrative expenses
|
15,126
|
|
13,018
|
|
|
|
|
Research
and development expenses
|
5,081
|
|
7,025
|
|
|
|
|
Other
operating income
|
(1,096)
|
|
(2,428)
|
|
|
|
|
Total operating
expenses
|
38,242
|
|
34,824
|
|
|
|
|
Operating
profit
|
1,648
|
|
3,134
|
|
|
|
|
Finance
income
|
1,329
|
|
772
|
|
|
|
|
Finance
expenses
|
(1,516)
|
|
(2,011)
|
|
|
|
|
Profit before
tax
|
1,461
|
|
1,895
|
|
|
|
|
Income
tax expenses
|
(839)
|
|
(339)
|
|
|
|
|
Profit for the year before
share of loss of a joint venture
and associated companies
|
622
|
|
1,556
|
|
|
|
|
Share of
loss of a joint venture and associated companies
|
(822)
|
|
(686)
|
|
|
|
|
Profit (loss) for the
year
|
(200)
|
|
870
|
|
|
|
|
Attributable to:
|
|
|
|
Owners of
the Company
|
(193)
|
|
244
|
Non-controlling interests
|
(7)
|
|
626
|
|
|
|
|
Profit (loss) for the
year
|
(200)
|
|
870
|
Earnings (loss) per share
(in cents):
|
|
|
|
Basic
& Diluted
|
(0.04)
|
|
0.06
|
BATM ADVANCED
COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
Year ended 31
December
|
2023
|
2022
|
|
US$'000
|
US$'000
|
|
Unaudited
|
Audited
|
|
|
|
Profit
(loss) for the period
|
(200)
|
870
|
|
|
|
Items that may be
reclassified subsequently
to profit or
loss:
|
|
|
|
|
|
Exchange
differences on translating foreign operations
|
|
|
|
|
|
|
3,112
|
(5,810)
|
|
|
|
Items that will not be
reclassified subsequently
to profit or
loss:
|
|
|
|
|
|
Re-measurement of defined benefit obligation
|
5
|
65
|
|
|
|
|
5
|
65
|
|
|
|
Total other comprehensive
income (loss) for the period
|
3,117
|
(5,745)
|
|
|
|
Total
comprehensive income (loss)
for the
period
|
|
|
Attributable
to:
|
|
|
Owners of
the Company
|
2,759
|
(5,727)
|
Non-controlling interests
|
|
|
|
|
|
BATM ADVANCED COMMUNICATIONS
LTD.
CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
|
31
December
|
|
2023
|
|
2022
|
|
US$'000
|
|
US$'000
|
|
Unaudited
|
|
Audited
|
Current
assets
|
|
|
|
Cash and
cash equivalents
|
32,339
|
|
35,156
|
Trade and
other receivables
|
31,219
|
|
36,495
|
Short-term
investment in deposits and other securities
|
8,425
|
|
9,011
|
Inventories
|
38,227
|
|
34,461
|
|
110,210
|
|
115,123
|
Non-current
assets
|
|
|
|
Property,
plant and equipment
|
16,051
|
|
15,309
|
Investment
property
|
612
|
|
620
|
Right
of-use assets
|
4,351
|
|
5,461
|
Goodwill
|
12,763
|
|
12,583
|
Other
intangible assets
|
8,019
|
|
5,948
|
Investment
in joint venture and associate
|
17,894
|
|
15,555
|
Investments carried at fair value
|
1,220
|
|
1,220
|
Deferred
tax assets
|
3,507
|
|
3,362
|
|
64,417
|
|
60,058
|
|
|
|
|
Total
assets
|
174,627
|
|
175,181
|
Current
liabilities
|
|
|
|
Short-term
bank credit
|
3,276
|
|
2,235
|
Trade and
other
payables
|
41,662
|
|
46,256
|
Current
maturities of lease liabilities
|
1,830
|
|
1,984
|
Tax
liabilities
|
359
|
|
818
|
|
47,127
|
|
51,293
|
Non-current
liabilities
|
|
|
|
Long-term
bank credit
|
1,328
|
|
2,000
|
Long-term
liabilities
|
3,449
|
|
3,472
|
Long-term
lease liabilities
|
2,650
|
|
3,758
|
Deferred
tax liabilities
|
39
|
|
120
|
Retirement
benefit obligation
|
598
|
|
537
|
|
8,064
|
|
9,887
|
|
|
|
|
Total
liabilities
|
55,191
|
|
61,180
|
Equity
|
|
|
|
Share
capital
|
1,320
|
|
1,320
|
Share
premium account
|
428,656
|
|
426,138
|
Reserves
|
(29,865)
|
|
(32,812)
|
Accumulated deficit
|
(279,767)
|
|
(279,579)
|
Equity attributable to
the:
|
|
|
|
Owners of
the Company
|
120,344
|
|
115,067
|
Non-controlling interests
|
(908)
|
|
(1,066)
|
Total
equity
|
119,436
|
|
114,001
|
Total equity and
liabilities
|
174,627
|
|
175,181
|
BATM ADVANCED COMMUNICATIONS
LTD.
CONSOLIDATED STATEMENTS OF
CHANGES IN EQUITY
Year ended 31 December 2023
(Unaudited)
|
|
|
|
|
Accumulated
|
Attributable to owners of
the Company
|
Non-controlling
interests
|
|
|
US$'000
|
Balance as at 1 January
2023
|
1,320
|
426,138
|
(26,039)
|
(6,773)
|
(279,579)
|
115,067
|
(1,066)
|
114,001
|
Loss for
the period
|
-
|
-
|
-
|
-
|
(193)
|
(193)
|
(7)
|
(200)
|
Re-measurement of defined benefit obligation
|
-
|
-
|
-
|
-
|
5
|
5
|
-
|
5
|
Exchange
differences on translating foreign operations
|
|
|
|
|
|
|
|
|
Total comprehensive income
(loss) for the year
|
-
|
-
|
2,947
|
-
|
(188)
|
2,759
|
158
|
2,917
|
Recognition of share-based payments
|
|
|
|
|
|
|
|
|
Balance as at 31 December
2023
(unaudited)
|
|
|
|
|
|
|
|
|
Year ended 31 December 2022
(Audited)
|
|
|
|
|
Accumulated
|
Attributable to owners of
the Company
|
Non-controlling
interests
|
|
|
|
US$'000
|
Balance as at 1 January
2022
|
1,320
|
425,840
|
(19,337)
|
(512)
|
(279,888)
|
127,423
|
(3,289)
|
124,134
|
|
Profit for
the period
|
-
|
-
|
-
|
-
|
244
|
244
|
626
|
870
|
|
Re-measurement of defined benefit obligation
|
-
|
-
|
-
|
-
|
65
|
65
|
-
|
65
|
|
Exchange
differences on translating foreign operations
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
(loss) for the year
|
-
|
-
|
(6,036)
|
-
|
309
|
(5,727)
|
852
|
(4,875)
|
|
Dividend
paid to non-controlling interest
|
-
|
-
|
-
|
-
|
-
|
-
|
(681)
|
(681)
|
|
Share
buy-back
|
-
|
-
|
-
|
(1,325)
|
-
|
(1,325)
|
-
|
(1,325)
|
|
Transaction with non-controlling interests
|
-
|
-
|
(666)
|
(4,936)
|
-
|
(5,602)
|
2,052
|
(3,550)
|
|
Recognition of share-based payments
|
|
|
|
|
|
|
|
|
|
Balance as at 31 December
2022
|
|
|
|
|
|
|
|
|
|
BATM ADVANCED COMMUNICATIONS
LTD.
CONSOLIDATED STATEMENT OF
CASH FLOW
|
|
|
|
Year ended 31 December
|
|
|
2023
|
2022
|
|
|
Unaudited
|
Audited
|
|
|
US$'000
|
US$'000
|
|
Net cash from (used in)
operating activities (Appendix
A)
|
|
|
|
Investing
activities
|
|
|
|
Purchases
of property, plant and equipment
|
(2,404)
|
(2,414)
|
|
Increase
of other intangible assets
|
(2,782)
|
(2,054)
|
|
Investment in joint venture and
associated companies
|
(2,060)
|
(4,386)
|
|
Purchases
of deposits and financial assets
|
(1,879)
|
(11,733)
|
|
Proceeds
on disposal of property, plant and equipment
|
228
|
4,514
|
|
Proceeds
on disposal of deposits and securities
|
2,777
|
4,941
|
|
Investment
in a subsidiary
|
-
|
(550)
|
|
Tax
payment related to disposal of a subsidiary
|
-
|
(4,953)
|
|
Other
(Appendix B)
|
-
|
293
|
|
Net cash used in investing
activities
|
(6,120)
|
(16,342)
|
|
Financing
activities
|
|
|
|
Lease
payment
|
(2,162)
|
(2,192)
|
|
Bank loan
repayment
|
(7,498)
|
(11,017)
|
|
Bank loan
received
|
7,500
|
12,465
|
|
Dividend
paid
|
-
|
(4,300)
|
|
Dividend paid to NCI
|
-
|
(681)
|
|
Share
buy-back
|
-
|
(1,325)
|
|
Net cash used in financing
activities
|
(2,160)
|
(7,050)
|
|
|
|
Net decrease
in cash and cash
equivalents
|
(3,271)
|
(26,176)
|
|
|
|
Cash and cash equivalents at
the beginning of the year
|
35,156
|
65,331
|
Effects of
exchange rate changes on the balance
of cash held in foreign currencies
|
|
|
Cash and cash equivalents at
the end of the year
|
|
|
|
|
|
|
|
|
|
|
BATM ADVANCED COMMUNICATIONS
LTD.
APPENDICES TO CONSOLIDATED
STATEMENT OF CASH FLOW
APPENDIX A
RECONCILIATION OF OPERATING
PROFIT FOR THE YEAR TO NET CASH FROM (USED IN) OPERATING
ACTIVITIES
|
Year ended 31
December
|
|
2023
Unaudited
$'000
|
|
2022
Audited
$'000
|
Operating profit from
operations
Adjustments
for:
|
1,648
|
|
3,134
|
Amortisation of intangible assets
|
795
|
|
557
|
Depreciation of property, plant and equipment and investment
property
|
4,381
|
|
4,334
|
Capital
gain of property, plant and equipment
|
(19)
|
|
(2,021)
|
Gain from
revaluation of investment carried at fair value
|
-
|
|
(192)
|
Gain from
business combination achieved in stages over an associated
company
|
-
|
|
(404)
|
Share-based payments
|
2,518
|
|
298
|
Increase
in retirement benefit obligation
|
24
|
|
23
|
Operating cash flow before
movements in working capital
|
9,347
|
|
5,729
|
Increase
in inventory
|
(3,998)
|
|
(3,258)
|
Decrease
(Increase) in receivables
|
4,606
|
|
(803)
|
Decrease
in payables
|
(5,644)
|
|
(1,186)
|
Effects of
exchange rate changes on the balance sheet
|
1,454
|
|
(1,556)
|
Cash from (used in)
operations
|
5,765
|
|
(1,074)
|
Income
taxes
paid
|
(694)
|
|
(985)
|
Interest
paid
|
(62)
|
|
(725)
|
Net cash from (used in)
operating activities
|
5,009
|
|
(2,784)
|
BATM ADVANCED COMMUNICATIONS
LTD.
APPENDICES TO CONSOLIDATED
STATEMENT OF CASH FLOW
APPENDIX B
BUSINESS COMBINATION
ACHIEVED IN STAGES OVER AN ASSOCIATED COMPANY
Towards the end of the year, the
Group gained control of one of its associated companies for an
immaterial amount.
|
2022
Audited
$'000
|
Net assets acquired
|
|
Current assets
|
523
|
Cash
|
29
|
Property, plant and
equipment
|
22
|
Current liabilities
|
(514)
|
|
60
|
Goodwill
|
1,429
|
Total consideration
|
1,489
|
|
|
Satisfied by:
|
|
Disposal of investment in
associated company
|
775
|
Liability of
acquisition
|
714
|
|
1,489
|
Net cash inflow arising on business
combination
|
|
Cash and cash equivalents
acquired
|
29
|
BATM ADVANCED COMMUNICATIONS
LTD.
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Note 1 -
General
This preliminary results
announcement should be read in conjunction with the audited annual
financial statements for the year ended 31 December 2022, which
have been prepared in accordance with International Financial Reporting Standards
("IFRS"). The
final results for the year ended 31 December 2023, which will be
prepared in accordance with IFRS, will be presented in the full
annual report and accounts.
Note 2 - Earnings per
share
Earnings per share is based on the
weighted average number of shares in issue for the period of
440,546,454 (2022: 440,167,097) including
4,495,000 ordinary shares held in treasury. The number used for the
calculation of the diluted earnings per share for the period (which
includes the effect of dilutive stock option plans) is
441,313,447 shares
(2022: 442,357,116).
Note 3 - Other alternative measures
Year ended 31 December 2023
(Unaudited(
|
|
|
|
|
US$
thousands
|
Gross
profit
|
39,890
|
568
|
40,457
|
Gross
margin (%)
|
32.5%
|
-
|
32.9%
|
Operating
profit
|
1,648
|
3,313
|
4,961
|
EBITDA
|
6,824
|
2,518
|
9,342
|
Year ended 31 December 2022
(Unaudited(
|
|
|
|
|
US$
thousands
|
Gross
profit
|
37,958
|
414
|
38,372
|
Gross
margin (%)
|
32.7%
|
-
|
33.0%
|
Operating
profit
|
3,134
|
855
|
3,989
|
EBITDA
|
8,025
|
298
|
8,323
|
(*) Adjusted to exclude
amortisation of intangible assets and share-based
payments.
EBITDA measurement
|
Year ended 31
December
|
|
2023
|
2022
|
|
|
|
|
US$
thousands
|
Operating
profit
|
1,648
|
3,134
|
Amortisation of Intangible assets
|
795
|
557
|
Share-based payments
|
2,518
|
298
|
Depreciation
|
4,381
|
4,334
|
Adj.
EBITDA
|
9,342
|
8,323
|
Note 4 -
Segments
Business
Segments
Operational segments are
identified on the basis of internal reports about the Group's
components that are reviewed by the main operational decision maker
of the Group ("CODM"), the CEO of the Company, for the purpose of
allocating resources and evaluating the performance of the
operational segments. Information reported to the CODM for the
purpose of resource allocation and assessment of segment
performance focuses on the types of goods or services delivered or
provided.
During the year, following an
in-depth process, the Group renewed its strategic vision.
Accordingly, the CODM now receives reports based on the new
strategy, which identifies the Group's core areas of activity, and
which are prioritised for resource allocation, and secondary
(non-core) activities.
The principal products and
services of each of these segments are as follows:
Networking - marketing,
research and development of data communication
products, which includes high-performance
connectivity solutions for the
network edge, including the innovative
Edgility open edge
software platform that enables the deployment and life-cycle
management of apps,
network functions and compute devices at the edge of the network,
and a broad portfolio of carrier
grade switching and routing hardware and software
products. Cyber - provision of
integrated hardware and software solutions for network encryption,
including hardware security modules (HSMs). Diagnostics - mainly engaged in
sales and distribution of in vitro diagnostics reagents and
instruments, including the development and
production of proprietary products. Its
proprietary products are focused on molecular diagnostics by test
type and infectious disease by application area. Secondary - mainly the distribution of pharmaceutical and
environmental monitoring products and
diagnostic tests, and the production of eco-friendly pathogenic
waste treatment solutions for medical, agricultural and
pharmaceutical applications.
The results for the year ended 31
December 2022 have been re-presented in accordance with the new
segmentation listed above.
Year ended 31 December 2023
(Unaudited)
|
Networking
$'000
|
Cyber
$'000
|
Diagnostics $'000
|
Secondary $'000
|
Total
$'000
|
Revenues
|
19,800
|
10,346
|
33,342
|
59,342
|
122,830
|
Operating
profit/(loss)
|
(224)
|
1,496
|
334
|
42
|
1,648
|
Net
finance expenses
|
|
|
|
|
(187)
|
Profit
before tax
|
|
|
|
|
1,461
|
Year ended 31 December 2022
(Audited)
|
Networking
$'000
|
Cyber
$'000
|
Diagnostics $'000
|
Secondary $'000
|
Total
$'000
|
Revenues
|
22,006
|
5,858
|
33,473
|
54,786
|
116,123
|
Operating
profit/(loss)
|
(899)
|
366
|
1,587
|
2,080
|
3,134
|
Net
finance expenses
|
|
|
|
|
(1,239)
|
Profit
before tax
|
|
|
|
|
1,895
|