REG - BATM Advanced Comm - Interim Results
24/08/2022 07:00
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RNS Number : 9895W BATM Advanced Communications Ld 24 August 2022
LEI: 213800FLQUB9J289RU66
24 August
2022
BATM Advanced Communications Limited
("BATM" or the "Group")
Interim Results
BATM (LSE: BVC; TASE: BVC), a leading provider of real-time technologies for
networking solutions and medical laboratory systems, announces its interim
results for the six months ended 30 June 2022.
Financial Summary
$m H1 2022 H1 2021
Results from ongoing operations (adjusted)*
Revenue 57.5 64.2
Revenue on a constant currency basis** 61.1 64.2
Gross profit 18.2 24.7
Gross margin 31.6% 38.4%
Operating profit 1.5 6.7
EBITDA 3.7 8.7
Reported results
Revenue 57.5 71.4
Gross profit 18.0 25.7
Gross margin 31.2% 36.0%
Operating profit 1.3 20.0
EBITDA 3.7 22.7
Basic earnings per share (cents) 0.03¢ 2.72¢
Cash and financial assets 47.4 64.9
* Adjusted to present the results on an ongoing operations basis by excluding
(1) the contribution to H1 2021 from NGSoft, a subsidiary that the Group sold
in March 2021, and (2) the amortisation of intangible assets for both periods.
The term 'ongoing operations' in this announcement is used for comparative
purposes only and is not used in the same context as in accounting standards.
For further information see Note 3 - Other Alternative Measures.
** Revenue from ongoing operations for H1 2022 based on the currency rates
prevailing in H1 2021. Revenue during the period was impacted by the
strengthening of the US dollar against the local currencies of subsidiaries in
the Bio-Medical division.
Operational Summary
Networking & Cyber Division (23% of total revenue)
· Revenue from ongoing operations (which excludes the contribution from
NGSoft to H1 2021) increased by 43.8% to $13.1m (H1 2021: $9.1m), which
primarily reflects growth in the Cyber unit
· Networking Unit
o Edgility edge computing and network function virtualisation ("NFV")
platform:
§ Generated first initial revenue from Edgility
§ Established two new partnerships to boost Edgility's sales and marketing
presence through the offering of joint solutions
§ Sustained engagement with several potential customers worldwide
§ Post period, CityFibre, the UK's largest independent carrier-neutral Full
Fibre platform, selected Edgility for piloting ahead of an expected national
deployment
o Network Edge (carrier ethernet and mobile backhaul):
§ Revenue maintained despite ongoing impact of supply chain challenges
§ New orders received primarily from repeat customers in the Americas and
Europe
· Cyber Unit
o Substantial growth in revenue from delivering on the high-value contracts
won in the previous year
o Significant backlog remaining for delivery in H2 and 2023
Bio-Medical Division (77% of total revenue)
· Revenue was $44.4m (H1 2021: $55.1m); on a constant currency basis,
revenue was $48.0m
· Diagnostics Unit
o Sales increased of molecular diagnostic products not related to COVID-19,
which was offset by market-wide reduction in prices, as well as lower demand,
for COVID-19 products as the global pandemic subsided
o New multi-respiratory test was CE registered with initial sales expected to
commence in Q4 2022
o Progressed development of new tuberculosis test kit, which was CE approved,
alongside Stop TB Partnership, an international alliance
o Opened new state-of-the-art diagnostics laboratories and facilities in Italy
and Israel to support the activity of ADOR Diagnostics ("ADOR"), which is
developing its proprietary isothermal diagnostic solution
o ADOR received an additional $10m of investment, of which the Group
contributed $4m (giving the Group an increased shareholding of 37.2%)
· Eco-Med Unit
o Accelerated progress, with the finalisation of two projects for delivery of
the Group's ISS AGRI solution and construction advanced on two further
installations
· Distribution Unit
o Increased sales from greater volume of regular business
Commenting on the results, Dr Zvi Marom, Chief Executive Officer of BATM,
said: "During the first half of the year, the Group saw solid performance in
both its divisions. In the Networking & Cyber division, there was
increased growth primarily from the Cyber unit. As expected, the Bio-Medical
division saw a reduction in revenue compared with the exceptional performance
in the first half of last year due to the pandemic.
"Looking ahead, the Group entered the second half with sustained momentum and
a significant backlog to be delivered against. The Cyber unit expects to
deliver solid growth and the Networking unit expects sales to continue to grow
in the second half of the year. The Bio-Medical division is expected to return
to growth in the second half as diagnostic products remain in demand across
the globe. Whilst mindful of the potential impact of global supply chain
challenges, and the need to secure further contracts, particularly in the
Bio-Medical division, the Group remains on track to deliver revenues for full
year 2022 in line with market expectations.
"BATM has established solid foundations in core technologies that it believes
will be market disrupters. Accordingly, the Board of BATM remains confident
in the prospects of the business and looks forward to delivering shareholder
value."
Enquiries:
BATM Advanced Communications
Dr Zvi Marom, Chief Executive Officer +972 9866 2525
Moti Nagar, Chief Financial Officer
Shore Capital
Mark Percy, Anita Ghanekar, James Thomas (Corporate Advisory) +44 20 7408 4050
Henry Willcocks (Corporate Broking)
Gracechurch Group
Harry Chathli, Claire Norbury +44 20 3488 7510
The information communicated in this announcement is inside information for
the purposes of Article 7 of Regulation 596/2014.
Investor & Analyst Presentation
Dr Zvi Marom, CEO, Moti Nagar, CFO, and Ariel Efrati, COO of BATM and CEO of
Telco Systems, will be holding a webinar for analysts and investors today at
1.00pm BST. To register to participate, please contact Henry Gamble at
Gracechurch Group at henrygamble@gracechurchpr.com
(mailto:henrygamble@gracechurchpr.com) .
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, 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.
Operational Review
The Group performed well during the six months to 30 June 2022. There was
strong growth from ongoing operations in the Networking & Cyber division.
In the Bio-Medical division, there was a reduction in revenue in the
Diagnostics unit, as expected, compared with the exceptional performance in
the first half of last year due to the pandemic while there was growth in the
Distribution unit and the Eco-Med unit was broadly in line with H1 2021. The
Bio-Medical division was also impacted by currency fluctuations.
Networking & Cyber Division
Adjusted* Reported
$m H1 2022 H1 2021 H1 2022 H1 2021
Revenue 13.1 9.1 13.1 16.4
Gross margin 40.1% 42.7% 39.2% 30.6%
Operating profit/(loss) (1.4) (2.7) (1.5) 10.9
* Adjusted to present the results an ongoing operations basis by excluding (1)
the contribution to H1 2021 from NGSoft, a subsidiary that the Group sold in
March 2021, and (2) the amortisation of intangible assets for both periods.
Revenue for the first half of the year from ongoing operations in the
Networking & Cyber division (excluding the contribution to H1 2021 from
NGSoft) increased by 43.8%, primarily reflecting growth in the Cyber unit. The
reduction in revenue on a reported basis is due to the contribution of NGSoft
to the Networking unit in H1 2021, a subsidiary that the Group sold in March
2021.
There was improvement in gross margin for both the Networking unit and the
Cyber unit respectively, and a significant increase in the division's gross
profit from ongoing operations primarily as a result of the strong performance
by the Cyber unit. The aggregate gross margin from ongoing operations
decreased due to the relative weight of both units.
On reported basis, gross margin increased significantly by 860bps. The
increase in mainly due to the lower margin nature of the NGSoft business
included in the previous period.
Operating loss from ongoing operations was reduced to $1.4m (H1 2021: $2.7m)
thanks to the higher revenue. On a reported basis, the operating loss was
$1.5m compared with an operating profit of $10.9m for H1 2021 as a result of
the exceptional capital gain of $13.0m from the sale of NGSoft.
Networking
In the Networking unit, revenue from ongoing operations (excluding the
contribution to H1 2021 from NGSoft) remained flat at $8.6m.
Edgility - Edge Computing and NFV solutions
During the period, the Group achieved a significant milestone for its
virtualised edge compute business as it commenced executing, and received its
first revenue, on two contracts for Edgility, which are expected to have an
aggregate value of $2.7m over a five-year period, that were awarded at the end
of 2021. This includes the first enterprise customer for Edgility, CEMEX,
S.A.B, (NYSE: CX), which is a global construction materials company, and
e-Qual, a global Managed Services Provider based in France that operates in 55
countries.
Edgility continued to undergo evaluation with leading network operators,
multi-service providers and systems integrators worldwide, which the Group
expects will result in proof-of-concepts and licence agreements in the second
half. This included extensive lab testing with CityFibre, the UK's largest
independent carrier-neutral Full Fibre platform, which resulted, post period,
in CityFibre piloting Edgility with selected partners ahead of an expected
national deployment to provide virtualised network services for businesses.
Edgility will enable CityFibre to begin its edge compute journey at scale,
with virtualisation of routing and other network services over tens of
thousands of disaggregated physical edge devices.
To expand the sales and marketing reach, and provide further routes to market,
the Group continued to establish strategic partnerships, which primarily
involve Edgility being pre-integrated with, or pre-installed on, the partner's
network appliances (with customers that use the Edgility solution contracting
with the Group directly). During the period, this includes establishing
partnerships with:
· Advantech (TWSE: 2395), a global leader in industrial IoT, which will
provide Edgility pre-installed on a variety of its universal edge network
appliances.
· NEXCOM International Co Ltd (TPEX: 8234), a leading supplier of
network appliances, which will provide Edgility pre-installed on its 5G-ready
device designed for the small-office-home-office and mid-range enterprise
market.
Network Edge solutions and services
Revenue from network edge solutions and services, where the Group provides
carrier ethernet and mobile backhaul platforms, was maintained despite the
ongoing impact of global electronic components shortages causing delays to the
delivery of some orders. The Group also continued to receive new orders, which
were primarily repeat orders from customers in the Americas and Europe. In
addition, the Group launched a new multipurpose, ultra-high capacity
demarcation platform, the TM-8106. The Group has received strong interest in
this new platform, with a number of customers having ordered units and
delivery due to commence this quarter.
Cyber
The Cyber unit performed strongly with revenue increasing substantially
reflecting the execution of contracts awarded in 2021, with a significant
backlog remaining to be delivered in the second half of the year and 2023.
The Cyber unit also continued its development efforts. In particular, it is in
the process of developing a version of its cyber security solution aimed
beyond the defence industry, including for the corporate market, which will
significantly expand the addressable market.
Bio-Medical Division
Adjusted* Reported
$m H1 2022 H1 2021 H1 2022 H1 2021
Revenue 44.4 55.1 44.4 55.1
Revenue on a constant currency basis** 48.0 55.1 - -
Gross margin 29.0% 37.7% 28.8% 37.6%
Operating profit 2.9 9.4 2.7 9.1
* Adjusted to exclude the amortisation of intangible assets.
** Revenue from ongoing operations for H1 2022 based on the currency rates
prevailing in H1 2021.
Revenue for the Bio-Medical division was $44.4m (H1 2021: $55.1m). On a
constant currency basis, excluding the impact of the strengthening of the US
dollar against local currencies, revenue was $48.0m (H1 2021: $55.1m). The
reduced revenue in the division also reflects lower sales in the Diagnostics
unit.
Adjusted gross margin for the division was 29.0% (H1 2021: 37.7%), primarily
reflecting the contribution to revenue in H1 2021 of the higher priced
COVID-19 products. The Bio-Medical division generated an adjusted operating
profit of $2.9m for H1 2022 compared with $9.4m for the first six months of
the previous year.
Diagnostics
Revenue in the Diagnostics unit accounted for 15.5% of the Bio-Medical
division compared with 32.3% in H1 2021. There was an increase in revenue from
the Group's range of molecular diagnostic products that are not related to
COVID-19, which were sold to customers in Europe and the Middle East. However,
this increase was more than offset by lower demand, as well as a market-wide
reduction in prices, for COVID-19 products as the global pandemic subsided,
alongside a negative impact of the strengthening of the US dollar against
local currencies.
During the period, the Group continued with its programme to enhance its
diagnostic operations. At its Adaltis subsidiary, this included steps to
optimise the production process and expand the molecular biology team. The
Group's ADOR associate company, which is developing the NATlab molecular
biology solution, opened a new state-of-the-art laboratory in Israel, which is
focused on research & development, and new product assembly rooms in Rome,
Italy.
The Group also continued to progress its development work. This includes its
new molecular diagnostics test for multiple respiratory pathogens receiving CE
certification. The Group is now finalising the diagnostic protocols (clinical
guidelines) for the multi-respiratory kit and it expects initial sales to
commence in Q4 2022.
The Group is developing a new test for the diagnosis of tuberculosis (TB) as
part of its work with the Stop TB Partnership, an international alliance
comprising governmental and non-governmental organisations. The new TB kit has
received CE certification.
ADOR finalised the development of its novel isothermal rolling circle
amplification ("RCA") method and incorporated it into a multi-respiratory
disease panel. The panel, which will be for laboratory use, will be the first
commercial application of this technology. In parallel, work continued on
incorporating it into the NATlab system, which is primarily designed for use
at point-of-care.
During the period, the Group and its partners invested an additional $10m into
ADOR, of which the Group contributed $4m (giving the Group an increased
shareholding of 37.2%). The additional investment contributed to the opening
of the new laboratory and will be used to prepare ADOR for the pre-production
stage, register additional patents (mainly in the US), progress development of
more disease panels and certifications and increase the cooperation with
international bodies, including the World Health Organisation.
Eco-Med
The Eco-Med unit accounted for 7.5% of the Bio-Medical division's revenues in
H1 2022 compared with 7.3% in H1 2021.
There was significant progress in deliveries of the Group's solution, the ISS
AGRI, for the treatment of pathogenic waste in agricultural and pharmaceutical
settings. This was primarily under contracts that had previously been secured,
but where completion had been delayed due to the restrictions as a result of
the pandemic. The Group completed the delivery of two of its ISS AGRI
contracts and advanced the delivery of two further installations, which are
due to complete by the end of the year.
Distribution
Revenue in the Distribution unit increased by 2.7% in H1 2022 over the same
period of the prior year and accounted for approximately 77.0% of the
Bio-Medical division's revenue (H1 2021: 60.4%). There was an increase in
sales from a greater volume of regular business
Financial Review
Adjusted* Reported
$m H1 2022 H1 2021 H1 2022 H1 2021
Revenue 57.5 64.2 57.5 71.4
Revenue on a constant currency basis** 61.1 64.2 - -
Gross margin 31.6% 38.4% 31.2% 36.0%
Operating profit 1.5 6.7 1.3 20.0
* Adjusted to present the results an ongoing operations basis by excluding (1)
the contribution to H1 2021 from NGSoft, a subsidiary that the Group sold in
March 2021, and (2) the amortisation of intangible assets for both periods.
** Revenue from ongoing operations for H1 2022 based on the currency rates
prevailing in H1 2021.
Total Group revenue for ongoing operations for the first half of 2022 was
$57.5m (2021: $64.2m), with growth in the Networking & Cyber division
being offset by a reduction in the Bio-Medical division, primarily reflecting
lower sales in the Diagnostic unit as well as the impact of the strengthening
of the US dollar. On a constant currency basis, revenue for ongoing operations
for the first half was $61.1m. The reduction in revenue on a reported basis
reflects the aforementioned as well as the contribution to H1 2021 revenue
from NGSoft before it was sold in March 2021.
The gross margin for ongoing operations for the first half of 2022 was 31.6%
compared with 38.4% for the same period of the previous year. This reflects
the contribution to H1 2021 revenue of the high-margin COVID-19 products as
well as the increased contribution to H1 2022 profit from lower-margin units.
Sales and marketing expenses were $8.0m (H1 2021: $9.2m), representing 13.9%
of revenue compared with 12.9% in H1 2021. General and administrative expenses
were $5.4m (H1 2021: $5.7m), representing 9.5% of revenue (H1 2021: 8.0%). The
reduction was due to H1 2021 including three months of expenses from NGSoft.
R&D expenses were $3.4m (H1 2021: $3.7m).
Adjusted operating profit for ongoing operations was $1.5m (H1 2021: $6.7m),
with the reduction primarily due to the lower revenue from COVID-19 products.
On a reported basis, operating profit (which includes amortisation) was $1.3m
compared with $20.0m for H1 2021, with the prior six-month period including a
capital gain of $13.0m from the sale of NGSoft.
As a result of the above, EBITDA was $3.7m for H1 2022 compared with $8.7m on
an ongoing operations basis and $22.7m on a reported basis for H1 2021.
Net finance expense was $0.6m (H1 2021: $0.2m). The higher financial expenses
were mainly due to the impact on balance sheet positions of the strengthening
of the US dollar compared with H1 2021.
The Group recorded a $0.3m tax income (H1 2021: $7.5m tax expense). The tax
income is a result of an approximately $1m non-cash tax incentive while H1
2021 included a non-recurring tax expense related to the NGSoft transaction.
Net profit after tax attributable to equity holders of the parent was $0.1m
(H1 2021: $12.0m) resulting in basic profit per share of 0.03¢ (H1 2021:
2.72¢).
As at 30 June 2022, inventory was in line with the position at year end at
$31.0m (31 December 2021: $31.0m; 30 June 2021: $33.8m). Trade and other
receivables were $34.7m (31 December 2021: $34.9m; 30 June 2021: $38.9m).
Intangible assets and goodwill at 30 June 2022 were $16.4m (31 December 2021:
$16.0m; 30 June 2021: $17.6m).
Property, plant and equipment and investment property was $18.6m (31 December
2021: $19.8m; 30 June 2021: $16.2m), with the reduction primarily due to the
currency impact on balance sheet positions.
The balance of trade and other payables was $36.6m (31 December 2021: $47.5m;
30 June 2021: $43.6m). This includes a dividend payment of $4.3m and a
significant currency impact on balance sheet positions.
Cash used in operating activities was $5.2m (H1 2021: $4.4m), with the change
primarily due to the timing of payments and collections.
At 30 June 2022, the Group had cash and cash equivalents and financial assets
of $47.4m (31 December 2021: $67.8m; 30 June 2021: $64.9m). Financial assets
represent cash deposits of more than three months' duration, held for trading
bonds and marketable securities. The change in cash and cash equivalents and
financial assets compared with the prior periods primarily reflects dividend
and buy-back payments of $5.1m; an additional investment in ADOR of $4m; and
the impact of the weakening of the currencies in which the Group's
subsidiaries operate compared with the US dollar.
Outlook
The Group has entered the second half with sustained momentum across the
business and a significant backlog to be delivered against.
In particular, in the Networking & Cyber division, the Cyber unit is
expected to deliver solid growth as government agencies continue to increase
licensing of its encryption products. In the Networking unit, the first half
saw initial contributions from the unit's Edgility platform for edge
computing and virtual networking following its launch last year. The Group
expects the division's revenue to continue to grow in the second half of the
year as it delivers against a significant backlog in both units.
The Bio-Medical division is expected to return to growth, with a significant
increase in revenue in the second half compared with the first half, as
diagnostic products remain in demand across the globe. The division is
expected to be the largest contributor to Group's revenues for the full
year.
Whilst mindful of the potential impact of global supply chain challenges, and
the need to secure further contracts, particularly in the Bio-Medical
division, the Group remains on track to deliver revenues for full year 2022 in
line with market expectations.
As stated above, the Group experienced exchange rate headwinds in the first
half of the year. BATM expects to continue to experience significant headwinds
in the second half of the year if the exchange rates remain the same.
BATM has established solid foundations in core technologies that it believes
will be market disrupters. The Board of BATM remains confident in the
prospects of the business and is working hard to demonstrate the substantial
value that exists within BATM. As part of this process, the Board has
committed to constantly examine the use of Group resources, including share
buy-backs, and looks forward to delivering shareholder value.
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED INCOME STATEMENTS
Six months ended 30 June
2022 2021
$'000 $'000
Unaudited Unaudited
Revenues 57,515 71,448
Cost of revenues 39,565 45,754
Gross profit 17,950 25,694
--------------- ---------------
Operating expenses
Sales and marketing expenses 7,980 9,215
General and administrative expenses 5,443 5,721
Research and development expenses 3,395 3,652
Other operating income (119) (12,917)
Total operating expenses 16,699 5,671
--------------- ---------------
Operating profit 1,251 20,023
Finance income 389 305
Finance expenses (1,029) (479)
Profit before tax 611 19,849
Income tax (expenses) 347 (7,462)
Profit for the period before share of loss of a joint venture
and associated companies
958 12,387
Share of loss of a joint venture and associated companies (288) _ _ (401)
Profit for the period 670 11,986
Attributable to:
Owners of the Company 145 11,979
Non-controlling interests 525 7
Profit for the period 670 11,986
Profit per share (in cents):
Basic 0.03 2.72
Diluted 0.03 2.70
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
Six months ended 30 June
2 0 2 2 2 0 2 1
$'000 $'000
Unaudited Unaudited
Profit for the period 670 11,986
Items that may be reclassified subsequently
to profit or loss:
Disposal of a foreign operation - (522)
Exchange differences on translating foreign operations (6,666) (2,195)
(6,666) (2,717)
Items that will not be reclassified subsequently
to profit or loss:
Re-measurement of defined benefit obligation 36 -
36 -
Total other comprehensive loss for the period (6,630) (2,717)
Total comprehensive income (loss) for the period (5,960) 9,269
Attributable to:
Owners of the Company (6,766) 9,190
Non-controlling interests 806 79
(5,960) 9,269
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 30 June 31 December
2 0 2 2 2 0 2 1 2 0 2 1
$'000 $'000 $'000
Unaudited Unaudited Audited
Current assets
Cash and cash equivalents 40,101 62,151 65,331
Trade and other receivables 34,678 38,902 34,932
Financial assets 7,263 2,742 2,432
Inventories 31,015 33,757 30,951
113,057 137,552 133,646
Non-current assets
Property, plant and equipment 16,962 14,379 18,107
Investment property 1,644 1,797 1,739
Right-of-use assets 5,650 6,310 6,570
Goodwill 11,129 11,407 11,385
Other intangible assets 5,237 6,219 4,648
Investment in joint venture and associate 15,616 13,138 12,667
Investments carried at fair value 1,220 1,027 1,027
Deferred tax assets 3,356 4,107 3,375
60,814 58,384 59,518
Total assets 173,871 195,936 193,164
Current liabilities
Short-term bank credit 4,731 4,968 1,634
Trade and other payables 36,562 43,641 47,519
Current maturities of lease liabilities 1,866 1,727 2,186
Tax liabilities 5,291 6,449 6,548
48,450 56,785 57,887
Non-current liabilities
Long-term bank credit 6 325 1,356
Long-term liabilities 3,221 4,583 3,888
Long-term lease liabilities 4,023 5,287 5,108
Deferred tax liabilities 175 140 170
Retirement benefit obligation 536 753 621
7,961 11,088 11,143
Total liabilities 56,411 67,873 69,030
Equity
Share capital 1,320 1,320 1,320
Share premium account 425,944 425,717 425,840
Reserves (26,933) (17,112) (19,849)
Accumulated deficit (279,707) (278,111) (279,888)
Equity attributable to the:
Owners of the Company 120,624 131,814 127,423
Non-controlling interest (3,164) (3,751) (3,289
Total equity 117,460 128,063 124,134
Total equity and liabilities 173,871 195,936 193,164
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Six months ended 30 June 2022
Share premium account Attributable to owners of the Company Non-controlling interests
Share capital Translation reserve Other Accumulated Total
Reserve Deficit equity
$'000
Balance as at 1 January 2022 1,320 425,840 (19,337) (279,888) 127,423 (3,289) 124,134
(512)
Profit for the period - - - - 145 145 525 670
Other comprehensive income
Re-measurement of defined benefit obligation
- - - - 36 36 - 36
Exchange differences on translating foreign operations
- - (6,947) - - (6,947) 281 (6,666)
Other comprehensive income (loss) for the period - - (6,947) - 36 (6,911) 281 (6,630)
Total comprehensive income (loss) for the period - - (6,947) - 181 (6,766) 806 (5,960)
Dividend paid to non-controlling interest - - - - - - (681) (681)
Share buy- back - - - (137) - (137) - (137)
Recognition of share-based payments - 104 - - - 104 - 104
Balance as at 30 June 2022 1,320 425,944 (26,284) (279,707) 120,624 (3,164) 117,460
(unaudited) (649)
Six months ended 30 June 2021
Share premium account Attributable to owners of the Company Non-controlling interests
Share capital Translation reserve Other Accumulated Total
Reserve Deficit equity
$'000
Balance as at 1 January 2021 1,320 425,686 (13,811) (512) (290,090) 122,593 (3,830) 118,763
Profit for the period - - - - 11,979 11,979 7 11,986
Other comprehensive income
Disposal of a foreign operation - - (522) - - (522) - (522)
Exchange differences of translating foreign operations
- - (2,267) - - (2,267) 72 (2,195)
Other comprehensive income (loss) for the period - - (2,789) - - (2,789) 72 (2,717)
Total comprehensive income for the period - - (2,789) - 11,979 9,190 79 9,269
Recognition of share-based payments - 31 - - - 31 - 31
Balance as at 30 June 2021 1,320 425,717 (16,600) (278,111) 131,814 (3,751) 128,063
(unaudited) (512)
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended 30 June
2 0 2 2 2 0 2 1
$'000 $'000
Unaudited Unaudited
Net cash from (used in) operating activities (Appendix A) (5,198) (4,364)
Investing activities
Interest received 35 13
Proceeds on disposal of property, plant and equipment 38 52
Proceeds on disposal of deposits 158 157
Proceeds on disposal of financial assets carried
at fair value through profit and loss
1,021 100
Purchases of property, plant and equipment (1,481) (607)
Increase of other intangible assets (1,071) (400)
Purchases of financial assets carried at fair value
through profit and loss
(1,529) -
Purchases of deposits (4,659) (157)
Net cash outflow on acquisition of business combinations - (309)
Investment in joint venture, associated companies and other (4,180) (160)
Proceeds from sale of subsidiary (Appendix B) - 18,662
Net cash from (used in) investing activities (11,668) 17,351
Financing activities
Lease payment (1,088) (1,147)
Bank loan repayment (3,666) (6,774)
Bank loan received 5,678 6,573
Dividend paid (4,300) -
Dividend paid to NCI (681) -
Share buy-back (137) -
Net cash used in financing activities (4,194) (1,348)
Net increase (decrease) in cash and cash equivalents (21,060) 11,639
Cash and cash equivalents at the beginning of the period 65,331 50,575
Effects of exchange rate changes on the balance
of cash held in foreign currencies
(4,170) (63)
Cash and cash equivalents at the end of the period 40,101 62,151
BATM ADVANCED COMMUNICATIONS LTD.
APPENDICES TO CONSOLIDATED STATEMENT OF CASH FLOWS
APPENDIX A
RECONCILIATION OF OPERATING PROFIT FOR THE PERIOD TO NET CASH USED IN
OPERATING ACTIVITIES
Six months ended 30 June
2022 2021
$'000 $'000
Unaudited Unaudited
Operating profit from operations 1,251 20,023
Adjustments for:
Amortisation of intangible assets 280 433
Depreciation of property, plant and equipment and investment property 2,127 2,226
Capital loss (gain) of property, plant and equipment 22 (22)
Profit from sale of a subsidiary - (13,035)
Gain from revaluation of investment carried at fair value (192) -
Stock options granted to employees 104 31
Decrease in retirement benefit obligation (43) (52)
Increase (decrease) in provisions 19 (2)
Operating cash flow before movements in working capital 3,568 9,602
Decrease (increase) in inventory (135) 136
Decrease (increase) in receivables 50 (5,009)
Decrease in payables (5,988) (4,725)
Effects of exchange rate changes on the balance sheet (1,488) (2,259)
Cash used in operations (3,993) (2,255)
Income taxes paid (733) (1,660)
Interest paid (472) (449)
Net cash used in operating activities (5,198) (4,364)
APPENDIX B
DISPOSAL OF SUBSIDIARY - NGSoft
On 19 March 2021, the Group entered into a sale agreement to dispose of NG
Soft Ltd. ("NGSoft (to Aztek Technologies (1984) Ltd., a provider of ICT cloud
services in Israel and a portfolio company of SKY Fund. NGSoft is a software
and digital services company that provides creative digital and technology
solutions.
Disposal of subsidiary - NGSoft
Six months ended 30 June
2021
$'000
Unaudited
Net assets disposed
Property, plant and equipment 1,144
Right of use 3,667
Other intangible assets 968
Net working capital 73
Lease liability (3,764)
Current tax liability (584)
Deferred tax liability (540)
Goodwill 5,185
Net assets disposed of 6,149
Disposal of a foreign operation translation reserve (522)
Gain on disposal 13,035
Total consideration 18,662
Net cash inflow arising on disposal:
Consideration received in cash and cash equivalents, net 20,903
Cash and cash equivalents disposed (2,241)
18,662
BATM ADVANCED COMMUNICATIONS LTD
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of preparation
The interim consolidated financial statements of the Group have been prepared
in conformity with International Accounting Standard No. 34 "interim financial
reporting" (hereafter "IAS 34").
In preparing these interim consolidated financial statements, the Group
implemented accounting policies, presentation principles and calculation
methods identical to those implemented in preparation of its consolidated
financial statements as of 31 December 2021 and for the period ended on that
date. The condensed interim financial statements should be read in conjunction
with the annual financial statements for the year ended 31 December 2021,
which have been prepared in accordance with IFRSs.
Note 2 - Profit per share
Profit per share is based on the weighted average number of shares in issue
for the period of 440,434,676 (H1 2021: 440,434,124). The number used for the
calculation of the diluted profit per share for the period (which includes the
effect of dilutive stock option plans) is 443,123,900 shares (H1 2021:
444,285,836).
Note 3 - Other alternative measures
1. Income statement adjustments - including (1) the contribution to 2021
from NGSoft, a subsidiary that the Group sold in March 2021, (2) adjustments
related to the amortisation of intangible assets.
Six months ended 30 June 2022 Reported results Adjustments to exclude NGSoft Amortisation of intangible assets Adjusted results (ongoing operations)
(Unaudited)
US$ thousands
Gross profit 17,950 - (207) 18,157
Gross margin (%) 31.2% - - 31.6%
Other operating expenses (income) (119) - 73 (192)
Operating profit 1,251 - (280) 1,531
Six months ended 30 June 2021 Reported results Adjustments to exclude NGSoft Amortisation of intangible assets Adjusted results (ongoing operations)
(Unaudited)
US$ thousands
Revenues 71,448 7,262 - 64,186
Gross profit 25,694 1,235 (207) 24,666
Gross margin (%) 36.0% 17.0% - 38.4%
Sales and marketing expenses 9,215 144 - 9,071
General and administrative expenses 5,721 358 - 5,363
Research and development expenses 3,652 - 108 3,544
Other operating expenses (income) (12,917) (12,994) 77 -
Operating profit 20,023 13,727 (392) 6,688
EBITDA 22,682 13,956 - 8,726
2. EBITDA measurement
Reported Adjusted
Six months ended 30 June Six months ended 30 June
US$ in thousands 2022 2021 2022 2021
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Operating profit 1,251 20,023 1,531 6,688
Amortisation of Intangible assets 280 433 - -
Depreciation 2,127 2,226 2,127 2,038
EBITDA 3,658 22,682 3,658 8,726
Note 4 - Segments
Business Segment
Six months ended 30 June 2022
Networking & Cyber Bio-Medical Unallocated Total
$'000 $'000 $'000 $'000
Revenues 13,104 44,411 - 57,515
Operating profit (1,491) 2,742 - 1,251
Net finance expense (640)
Profit before tax 611
Six months ended 30 June 2021
Networking & Cyber Bio-Medical Unallocated Total
$'000 $'000 $'000 $'000
Revenues 16,377 55,071 - 71,448
Operating profit 10,889 9,134 - 20,023
Net finance expense (174)
Profit before tax 19,849
Note 5 - Revenue from major products and services
The following is an analysis of the Group's revenue from operations from its
major products and services according to IFRS 15:
Six months ended 30 June
2022 2021
$'000 $'000
Unaudited Unaudited
Telecommunication products 7,355 6,670
Software services 5,750 9,707
Distribution of medical products 34,175 33,289
Diagnostic products 6,894 17,786
Eco-Med products 3,341 3,996
57,515 71,448
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