Ethernity Networks Ltd Full Year Trading Update (6414V)
December 05 2023 - 1:00AM
UK Regulatory
TIDMENET
RNS Number : 6414V
Ethernity Networks Ltd
05 December 2023
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the UK version of the Market Abuse Regulations (EU) No. 596/2014
("MAR"). With the publication of this announcement via a Regulatory
Information Service, this inside information is now considered to
be in the public domain.
05 December 2023
ETHERNITY NETWORKS LTD.
("Ethernity" or the "Company")
Full year trading update
Ethernity Networks (AIM: ENET.L; OTCMKTS: ENETF), a leading
supplier of data processing and fibre access semiconductor
technology for networking appliances, is pleased to provide an
update on the Company's anticipated trading for the year ending 31
December 2023 ("FY 2023").
Subject to completion of the FY2023 audit, the Company
anticipates that its headline results for 2023 will be:
-- revenue of between US$3.6m and US$3.8m (2022: US$2.97m);
-- underlying gross profit of between US$2.4m and US$2.6m (2022:
US$1.59m) representing an underlying gross margin of 67%-68% (2022:
54%);
-- EBITDA loss of not more than US$3.8m (2022: EBITDA loss of US$6.4m); and
-- a reduction in monthly operating expenses from US$660k in
June 2023 to US$300k in December 2023.
The Company's current cash balance is c. US$954k. This includes
the proceeds of the NIS 1,000,000 short term loan from David Levi,
CEO of Ethernity, details of which were announced on 26 October
2023. Under the ongoing temporary suspension of proceedings ("TSP")
process, details of which were announced on 12 October 2023 (the
"TSP Announcement"), the Company will be required to agree a
settlement with its creditors from the commencement of the TSP. The
Board anticipates that the current cash balances, together with the
anticipated cash receipts due ahead of the year end (details of
which were announced on 29 November 2023), will enable the Company
to exit the TSP process. Notwithstanding this, the Company is
considering options to raise additional funding to strengthen its
balance sheet, which the Directors believe would improve the
Company's ability to secure significant contracts with potential
new customers.
Outlook
Subject to successfully exiting the TSP, the Company's strategic
focus for 2024 will be on enhancing sales of its Universal Edge
Platform ("UEP") fibre access offering, including the low power
remote OLT and optical interworking units, as well as its 5G Open
RAN data plane offload solutions. These solutions are based on
Ethernity's networking semiconductor technology that enables it to
provide a differentiated and innovative offering to its customers.
The Board considers that these growing markets offer significant
growth potential for Ethernity.
The Company's UEP employs the ENET Flow Processor firmware with
best-in-class Carrier Ethernet Switch technology that, to date, has
been deployed in more than 950,000 different systems. The global
market for Carrier Ethernet Access devices was estimated to be
valued at US$17.2 billion in 2022 [1] and several OEMs are
currently evaluating the Company's UEP. The UEP is available to
potential customers either through licensing of the Company's IP or
via sales of complete systems, including software applications up
to an eASIC offering. While the majority of the ongoing discussions
with OEMs for Ethernity's UEP are in the field of support for
wireless link bonding, certain potential opportunities are
targeting general purpose Carrier Ethernet Switch appliances, which
include other unique monitoring and AI differentiated networking
functions. Ethernity is able to provide a differentiated and
cost-effective offering to its clients due to the Company's
proprietary IP and technology.
An updated version of the Ethernity's corporate presentation,
providing further background to the Company's target markets and
solutions in these markets, will shortly be available on the
Company's website, www.ethernitynet.com/investors.
David Levi, CEO of Ethernity Networks, commented: "While we have
had an extremely challenging year, particularly over the last three
months, the team has been working tirelessly to release the UEP
products with the required functionalities for our targeted
customers. Together with our Fibre Access offering, which is
targeting the US$50bn PON Market, and our 5G Open RAN data plane
offload solutions, we are hopeful that 2024 will be a
transformative year for Ethernity and, with our careful cost
control on the reduced operating cost base, our goal is to generate
positive cashflow."
For further information, please contact:
Ethernity Networks Ltd Tel: +972 8 915 0392
David Levi, Chief Executive Officer
Allenby Capital Limited (Nominated Adviser Tel: +44 (0)20 3328
and Joint Broker) 5656
James Reeve / Piers Shimwell (Corporate
Finance)
Amrit Nahal / Stefano Aquilino (Sales
and Corporate Broking)
Peterhouse Capital Limited (Joint Broker) Tel: +44 (0)20 7562
0930
Lucy Williams / Duncan Vasey / Eran Zucker
About Ethernity (www.ethernitynet.com)
Ethernity Networks (AIM: ENET.L OTCMKTS: ENETF) provides
innovative, comprehensive networking and security solutions on
programmable hardware that increase telco/cloud network
infrastructure capacity. Ethernity's semiconductor logic offers
data processing functionality for different networking
applications, innovative patented wireless access technology, and
fibre access media controllers, all equipped with control software
with a rich set of networking features. Ethernity's solutions
quickly adapt to customers' changing needs, improving
time-to-market, and facilitating the deployment of 5G over wireless
and fibre infrastructure.
[1]
https://www.researchandmarkets.com/reports/3301144/carrier-ethernet-access-devices-global
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