REG - BATM Advanced Comm - Interim Results
29/08/2023 07:00
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RNS Number : 5457K BATM Advanced Communications Ld 29 August 2023
LEI: 213800FLQUB9J289RU66
29 August
2023
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 2023.
Financial Summary*
$m H1 2023 H1 2022
Revenue 60.2 57.5
Gross profit 21.3 18.2
Gross margin 35.3% 31.6%
Operating profit 2.2 1.6
EBITDA 4.4 3.8
Profit before tax 2.3 1.0
Basic earnings per share (cents) 0.39¢ 0.12¢
Cash from/(used in) operating activities 0.5 (5.2)
Cash and short-term investments including investments in deposits and other
securities at 30 June 2023 were $41.9m (31 December 2022: $44.2m).
*Adjusted to exclude amortisation of intangible assets and share-based
payments. For further detail, see the Financial Review
Strategic & Operational Summary
· Achieved revenue growth in both the Networking & Cyber and
Bio-Medical divisions respectively and gross margin improvement in all of the
Group's business units
· Completion of in-depth internal review of all business operations to
focus Group on its core business lines within the Networking, Cyber and
Diagnostics units and introduce organisational improvements
Networking
· Edgility edge computing platform:
o Five-year contract won from a leading provider of emergency connectivity
services in North America
o Rollout progressed with CityFibre and CEMEX
o Proof-of-concepts conducted with a number of potential customers worldwide,
including Tier 1 operators in Europe
o Established new partnership to increase sales and marketing reach in EMEA
· Carrier ethernet solutions:
o Strong growth reflecting increased delivery of 10G and 100G solutions
o Development continued of new 10GE platform that is expected to be launched
later this year
Cyber
· Won a $26m multi-year government defence contract for latest
high-performance cyber security solution
· Development continued of advanced encryption solutions using quantum
key distribution and to expand the Group's offering into further markets
Diagnostics
· Sales of diagnostic products in line with the comparative period when
excluding COVID-19 contribution
· ADOR Diagnostics progressed development of disruptive NATlab molecular
diagnostics platform, with in-hospital pre-clinical trials commencing post
period
Moti Nagar, Chief Executive Officer of BATM, said: "We are pleased to announce
a strong set of results for the first half of 2023. We achieved growth in all
key financial parameters and operational progress in each business unit. We
have also undertaken a comprehensive review of each business unit and their
market opportunity, and now have a clear focus on which entities are core to
the future success of the Group and that can drive a step change in our
financial performance.
"Looking ahead, we have entered the second half of the year in a better
position than at the same point last year, with sustained revenue momentum and
a higher backlog. We expect to deliver year-on-year growth in Networking,
with increased revenues from both carrier ethernet and Edgility. Our cyber
business revenues are expected to be higher in the second half than in H1 as
we ramp up delivery of our large contract won earlier this year. Our
Bio-Medical division is also expected to continue to increase sales. As a
result, we expect to report year-on-year growth for 2023, in line with market
expectations."
Enquiries
BATM Advanced Communications
Moti Nagar, Chief Executive Officer +972 9866 2525
Ran Noy, Chief Financial Officer
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 Thursday 7 September 2023 at 1.00pm BST. To register to
participate or submit a question in advance, please use the following link:
https://forms.gle/9j9B24EPhk3dwX2s6 (https://forms.gle/9j9B24EPhk3dwX2s6) .
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.
Strategy Update
During the first half of the year, an in-depth process was undertaken to
assess the Group's business, strategy and markets. Through this exercise, 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 Diagnostic lines of business have been established
as the Group's core areas of activity and prioritised for resource allocation.
Over time, the Group may add capability through M&A to these core
businesses, and divest other business units where the Group can secure
attractive terms. In the near term, the Distribution and Eco-Med business
lines will be maintained, with the Group continuing to pursue growth in those
areas as appropriate.
Operational Summary
The Group delivered a strong performance in the first half of the year,
resulting in growth in the Networking & Cyber and Bio-Medical divisions
respectively. There were increased revenues from both Carrier Ethernet and
Edgility in Networking, while the Group won a significant Cyber contract. In
Diagnostics, sales were in-line with the comparative period when excluding the
contribution to H1 2022 of products related to COVID-19. There was also an
increase in sales in the Distribution and Eco-Med units. In addition, the
Group continued its development work, including new platforms due to be
launched later this year in the Diagnostics and Networking lines of business.
As a result of the strong performance in both divisions, the Group delivered a
significant improvement in EBITDA (excluding share-based payments) to $4.4m
(H1 2022: $3.8m) and generated cash from operating activities of $0.5m
compared with cash used in operating activities of $5.2m in the first half of
the previous year.
Networking & Cyber Division
$m H1 2023 H1 2022
Revenue 13.3 13.1
Gross margin* 51.2% 40.1%
Operating profit/(loss)* 0.1 (1.3)
* Adjusted to exclude amortisation of intangible assets and share-based
payments.
Revenue for the first half of the year in the Networking & Cyber division
increased. There was improvement in gross margin for both the Networking unit
and the Cyber unit respectively, as well as on an aggregate basis, resulting
in an increase in the division's gross profit. This reflects the contribution
to Networking revenue from sales of Edgility and that revenue in the Cyber
unit was based on the provision of services, which are higher margin. On an
adjusted basis to exclude share-based payments, the Networking & Cyber
division generated an operating profit compared with a loss for the first half
of the previous year.
Networking
In the Networking unit, revenue increased by 34.4% reflecting significant
growth in both the Group's Edgility and carrier ethernet business lines.
Edgility edge computing platform
During the period, the Group was awarded a five-year contract by a leading
provider of emergency connectivity services in North America (the "Customer")
for its Edgility platform for edge computing. The Customer is using Edgility
to deliver the call-handling system for 911 Emergency Services and the
988 National Suicide Prevention & Mental Health Crisis Lifeline across a
major US state. This represents the first time Edgility is being used for a
government application and to support critical public infrastructure. The
Group is also exploring with the Customer the potential to expand the use of
Edgility to deliver the emergency connectivity services in other US states as
well as outside the US.
The rollout of Edgility continued with CityFibre, the UK's largest independent
carrier-neutral Full Fibre platform, and CEMEX, S.A.B, (NYSE: CX), a global
construction materials company. The current deployment with CityFibre is due
to complete by the end of this year, and the Group expects to receive further
orders from this customer. The deployment with CEMEX, which was accelerated
during the period, is due to complete in 2024, with CEMEX's sites in a number
of countries in Europe and Central and South America having already gone live
this year.
Edgility continued to undergo evaluation and proof-of-concepts with leading
network operators (including Tier 1 operators in Europe), multi-service
providers, Partners and systems integrators worldwide. In further reflection
of the increased recognition of Edgility as a breakthrough solution, the Group
was honoured that Telco Systems was named in the Gartner Hype Cycle for Edge
Computing 2023 as a vendor of edge management and orchestration solutions.
The Group continued to generate revenue through its partnership with
Advantech, a global leader in industrial IoT that is providing Edgility
pre-installed on a variety of its universal edge network appliances. The Group
also established a new collaboration with Innovetech, which specialises in
delivering digital transformation projects for EMEA service providers, to
provide a further route-to-market.
Carrier ethernet solutions
There was strong growth in revenue from the Group's carrier ethernet
solutions. This was driven by the delivery of its high-performance 10G and
100G products.
The Group continued to develop its product portfolio. In particular,
development continued on an upgraded, cost effective 10GE demarcation device
that is expected to be launched later this year.
Cyber
During the period, the Group was awarded a $26m contract, to be delivered over
a maximum of five years, from its long-standing defence department customer
for its latest high-performance cyber security solution. Delivery under this
contract is expected to ramp in the second half of the year and into next
year, with the Group already manufacturing product under this contract with
revenue to be recognised upon delivery. As a result, the Cyber unit's revenue
during the period was lower than in the first half of 2022. The Group
continues to expect to receive further orders in the Cyber unit in the second
half of the year.
The Cyber unit also continued its development programme. This includes
solutions, such as quantum key distribution (QKD) and post-quantum encryption,
that are designed to address cyber risk in the quantum computing era. It also
includes solutions that will allow BATM to expand its offer to new markets,
such as further government agency customers and the commercial market.
Bio-Medical Division
$m H1 2023 H1 2022
Revenue 46.9 44.4
Gross margin* 30.8% 29.0%
Operating profit* 2.2 2.9
* Adjusted to exclude amortisation of intangible assets and share-based
payments.
Revenue for the Bio-Medical division increased by 5.6% to $46.9m (H1 2022:
$44.4m), reflecting growth in the Eco-Med and Distribution units, which more
than offset a reduction in sales of products relating to COVID-19.
There was improvement in gross margin for the Diagnostics, Eco-Med and
Distribution units respectively, as well as on an aggregate basis. This was
achieved despite the contribution to H1 2022 from higher margin COVID-19
products. The Bio-Medical division generated an adjusted operating profit of
$2.2m for H1 2023 compared with $2.9m for the first six months of the previous
year, which reflects an increase in sales & marketing expenses in this
financial period.
Diagnostics
Revenues in the Diagnostics unit in H1 2023 were level with H1 2022 when
excluding the contribution to both periods from sales related to COVID-19
products, and were lower on an absolute basis.
The Group continued to progress its development and engineering work on new
reagents, kits and instruments. In particular, the Group is preparing to
launch 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.
ADOR Diagnostics ("ADOR"), an associate company of the Group that is
developing the disruptive NATlab molecular biology platform, made strong
progress during the period in finalising the development of a new advanced
biological process and upgraded cartridge and instrument designs. Two further
international patents were also granted during the period. Post period, ADOR
achieved a key milestone with pre-clinical trials of the NATlab commencing at
a hospital in Israel, which are expected to conclude at the end of the year.
Eco-Med
Revenue in the Eco-Med unit grew by 51.3% in H1 2023 over H1 2022. This was
based on increased sales of the unit's bio-waste treatment products for
medical settings, including completion of the installation of its ISS-based
solution at a hospital.
Distribution
Revenue in the Distribution unit increased by 11.1% in H1 2023 over the same
prior year period. This was primarily due to greater volume of sales as well
as some price increases.
Financial Review
$m H1 2023 H1 2022
Revenue 60.2 57.5
Gross margin* 35.3% 31.6%
Operating profit* 2.2 1.6
* Adjusted to exclude amortisation of intangible assets and share-based
payments. For further detail, see the Financial Review
Total Group revenue for the first half of 2023 increased to $60.2m (2022:
$57.5m), reflecting growth in both the Networking & Cyber and Bio-Medical
divisions.
On an adjusted basis to exclude the amortisation of intangible assets, gross
margin improved by 370 basis points to 35.3% (H1 2022: 31.6%). On a reported
basis, gross margin increased to 34.9% (H1 2022: 31.2%). This reflects
improvement in the gross margin in all of the Group's units.
Sales and marketing expenses were $9.5m (H1 2022: $8.0m), with the increase
reflecting activities to support the higher revenues and continue to build
capability to support future growth opportunities. General and administrative
expenses were $7.7m (H1 2022: $5.4m). The increase reflects share-based
payments, which are non-cash, being $1.2m compared with $0.1m in H1 2022.
R&D expenses were $3.3m (H1 2022: $3.4m).
On an adjusted basis, to exclude the share-based payments expense and
amortisation of intangible assets (see Note 3), operating profit grew by 36.3%
to $2.2m (H1 2022: $1.6m) due to the increased revenues and margin. On a
reported basis, the growth was offset by the increase in non-cash share-based
payments resulting in an operating profit of $0.6m compared with $1.3m for H1
2022.
As a result of the above, EBITDA (excluding share-based payments) increased to
$4.4m for H1 2023 compared with $3.8m for H1 2022.
Net finance income was $0.1m compared with an expense of $0.6m for H1 2022.
Profit before tax on an adjusted basis increased to $2.3m (H1 2022: $1.0m) and
to $0.7m on a reported basis (H1 2022: $0.6m).
The Group recorded a $0.2m tax expense (H1 2022: $0.3m tax income).
On an adjusted basis, net profit after tax attributable to equity holders of
the parent was $1.7m (H1 2022: $0.5m) and $0.1m on a reported basis (H1 2022:
$0.1m), primarily reflecting the tax expense compared with a tax income in the
previous year. As a result, profit per share on an adjusted basis increased to
0.39¢ (H1 2022: 0.12¢) and to 0.02¢ (H1 2022: 0.03¢) on a reported basis.
As at 30 June 2023, inventory was $37.5m (31 December 2022: $34.5m). Trade and
other receivables were $34.2m (31 December 2022: $36.5m). Intangible assets
and goodwill at 30 June 2023 were $19.3m (31 December 2022: $18.5m).
Property, plant and equipment and investment property was $16.2m (31 December
2022: $15.9m).
Trade and other payables was $43.3m (31 December 2022: $46.3m).
Cash inflow from operating activities was $0.5m compared with outflow of $5.2m
in H1 2022. This significant improvement reflects a decrease in working
capital and a strong emphasis on collections.
At 30 June 2023, the Group had cash and short-term investments of $41.9m (31
December 2022: $44.2m; 30 June 2022: $47.4m).
Outlook
BATM entered the second half of 2023 in a better position than at the same
point in the previous year, with sustained revenue momentum and a higher
backlog.
For full year 2023, the Group expects to deliver year-on-year growth in
Networking as revenue from the Group's carrier ethernet and Edgility solutions
continue to increase. Cyber revenues are expected to be higher in the second
half than in the first half as the Group ramps up delivery of the large
contract signed in H1 2023. The Group also remains confident of securing
further cyber orders in the near term. BATM expects Diagnostics to return to
growth in the second half compared with the first half, as it delivers on
orders received during the year. The Distribution and Eco-Med businesses are
also expected to deliver an increase in revenue over the previous year. As a
result, the Group is on track to report year-on-year growth for FY 2023, in
line with market expectations.
The Group continues to have a strong balance sheet as well as property and
valuable IP. Accordingly, the Board remains confident in the Group's prospects
and looks forward to reporting on its progress.
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED INCOME STATEMENTS
Six months ended 30 June
2023 2022
US$'000 US$'000
Unaudited Unaudited
Revenues 60,170 57,515
Cost of revenues 39,168 39,565
Gross profit 21,002 17,950
--------------- ---------------
Operating expenses
Sales and marketing expenses 9,483 7,980
General and administrative expenses 7,743 5,443
Research and development expenses 3,252 3,395
Other operating income (92) (119)
Total operating expenses 20,386 16,699
--------------- ---------------
Operating profit 616 1,251
Finance income 788 389
Finance expenses (678) (1,029)
Profit before tax 726 611
Income tax (expenses) (219) 347
Profit for the period before share of loss of a joint venture
and associated companies
507 958
Share of loss of a joint venture and associated companies (447) (288)
Profit for the period 60 670
Attributable to:
Owners of the Company 71 145
Non-controlling interests (11) 525
Profit for the period 60 670
Profit per share (in cents):
Basic 0.02 0.03
Diluted 0.02 0.03
-
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
Six months ended 30 June
2023 2022
US$'000 US$'000
Unaudited Unaudited
Profit for the period 60 670
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translating foreign operations 775 (6,666)
775 (6,666)
Items that will not be reclassified subsequently
to profit or loss:
Re-measurement of defined benefit obligation - 36
- 36
Total other comprehensive income (loss) for the period 775 (6,630)
Total comprehensive income (loss) for the period 835 (5,960)
Attributable to:
Owners of the Company 746 (6,766)
Non-controlling interests 89 806
835 (5,960)
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 30 June 31 December
2023 2022 2022
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Current assets
Cash and cash equivalents 33,716 40,101 35,156
Trade and other receivables 34,204 34,678 36,495
Short-term investment in deposits and other securities 8,175 7,263 9,011
Inventories 37,484 31,015 34,461
113,579 113,057 115,123
Non-current assets
Property, plant and equipment 15,621 16,962 15,309
Investment property 616 1,644 620
Right-of-use assets 5,003 5,650 5,461
Goodwill 12,572 11,129 12,583
Other intangible assets 6,713 5,237 5,948
Investment in joint venture and associate 15,846 15,616 15,555
Investments carried at fair value 1,220 1,220 1,220
Deferred tax assets 3,380 3,356 3,362
60,971 60,814 60,058
Total assets 174,550 173,871 175,181
Current liabilities
Short-term bank credit 5,625 4,731 2,235
Trade and other payables 43,284 36,562 46,256
Current maturities of lease liabilities 1,904 1,866 1,984
Tax liabilities 318 5,291 818
51,131 48,450 51,293
Non-current liabilities
Long-term bank credit - 6 2,000
Long-term liabilities 3,411 3,221 3,472
Long-term lease liabilities 3,247 4,023 3,758
Deferred tax liabilities 85 175 120
Retirement benefit obligation 556 536 537
7,299 7,961 9,887
Total liabilities 58,430 56,411 61,180
Equity
Share capital 1,320 1,320 1,320
Share premium account 427,422 425,944 426,138
Reserves (32,137) (26,933) (32,812)
Accumulated deficit (279,508) (279,707) (279,579)
Equity attributable to the:
Owners of the Company 117,097 120,624 115,067
Non-controlling interest (977) (3,164) (1,066)
Total equity 116,120 117,460 114,001
Total equity and liabilities 174,550 173,871 175,181
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the six months ended 30 June 2023
Share premium account Attributable to owners of the Company Non-controlling interests
Share capital Translation reserve Other Accumulated Total
Reserve deficit equity
US$'000
Balance as at 1 January 2023 1,320 426,138 (26,039) (6,773) (279,579) 115,067 (1,066) 114,001
Profit for the period - - - - 71 71 (11) 60
Exchange differences on translating foreign operations
- - 675 - - 675 100 775
Total comprehensive income for the period - - 675 - 71 746 89 835
Recognition of share-based payments - 1,284 - - - 1,284 - 1,284
Balance as at 30 June 2023 1,320 427,422 (25,364) (279,508) 117,097 (977) 116,120
(unaudited) (6,773)
For the six months ended 30 June 2022
Share premium account Attributable to owners of the Company Non-controlling interests
Share capital Translation reserve Other Accumulated Total
reserve deficit equity
US$'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
Re-measurement of defined benefit obligation
- - - - 36 36 - 36
Exchange differences on translating foreign operations
- - (6,947) - - (6,947) 281 (6,666)
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)
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended 30 June
2023 2022
US$'000 US$'000
Unaudited Unaudited
Net cash from (used in) operating activities (Appendix A) 505 (5,198)
Investing activities
Purchases of property, plant and equipment (1,110) (1,481)
Increase of other intangible assets (1,000) (1,071)
Proceeds on disposal of deposits 1,182 158
Proceeds on disposal of financial assets carried
at fair value through profit and loss
- 1,021
Purchases of financial assets carried at fair value
through profit and loss
- (1,529)
Purchases of deposits - (4,659)
Deposit in escrow (686) -
Investment in joint venture, associated companies and other (171) (4,180)
Interest received - 35
Proceeds on disposal of property, plant and equipment 83 38
Net cash used in investing activities (1,702) (11,668)
Financing activities
Lease payment (1,195) (1,088)
Bank loan repayment - (3,666)
Bank loan received 1,160 5,678
Dividend paid - (4,300)
Dividend paid to NCI - (681)
Share buy-back - (137)
Net cash used in financing activities (35) (4,194)
Net decrease in cash and cash equivalents (1,232) (21,060)
Cash and cash equivalents at the beginning of the period 35,156 65,331
Effects of exchange rate changes on the balance
of cash held in foreign currencies
(208) (4,170)
Cash and cash equivalents at the end of the period 33,716 40,101
BATM ADVANCED COMMUNICATIONS LTD.
APPENDICES TO CONSOLIDATED STATEMENT OF CASH FLOWS
APPENDIX A
RECONCILIATION OF OPERATING PROFIT FOR THE PERIOD TO NET CASH FROM/(USED IN)
OPERATING ACTIVITIES
Six months ended 30 June
2023 2022
US$'000 US$'000
Unaudited Unaudited
Operating profit from operations 616 1,251
Adjustments for:
Amortisation of intangible assets 329 280
Depreciation of property, plant and equipment and investment property 2,161 2,127
Capital (gain) loss of property, plant and equipment (29) 22
Gain from revaluation of investment carried at fair value - (192)
Stock options granted to employees 1,284 104
Decrease in retirement benefit obligation - (43)
Increase in provisions 34 19
Operating cash flow before movements in working capital 4,396 3,568
Increase in inventory (3,023) (135)
Decrease in receivables 2,318 50
Decrease in payables (3,327) (5,988)
Effects of exchange rate changes on the balance sheet 441 (1,488)
Cash from (used in) operations 805 (3,993)
Income taxes paid (485) (733)
Interest received (paid) 185 (472)
Net cash from (used in) operating activities 505 (5,198)
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".
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 2022 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 2022,
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 436,039,124 (H1 2022: 440,434,676). 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 436,758,643 shares (H1 2022:
443,123,900).
Note 3 - Other alternative measures
1. Income statement adjustments - including (1) non-cash share-based
payments, and (2) the amortisation of intangible assets.
Six months ended 30 June 2023 Reported results Share-based payments Amortisation of intangible assets Adjusted results
(Unaudited)
US$ thousands
Gross profit 21,002 - (261) 21,263
Gross margin (%) 34.9% - - 35.3%
Sales and marketing expenses 9,483 61 - 9,422
General and administration expenses 7,743 1,206 - 6,537
Research and development expenses 3,252 17 15 3,220
Other operating expenses (income) (92) - 53 (145)
Operating profit 616 (1,284) (329) 2,229
Six months ended 30 June 2022 Reported results Share-based payments Amortisation of intangible assets Adjusted results
(Unaudited)
US$ thousands
Gross profit 17,950 - (207) 18,157
Gross margin (%) 31.2% - - 31.6%
General and administration expenses 5,443 75 - 5,368
Research and development expenses 3,395 29 - 3,366
Other operating expenses (income) (119) - 73 (192)
Operating profit 1,251 (104) (280) 1,635
2. EBITDA measurement
Reported Adjusted
Six months ended 30 June Six months ended 30 June
US$ in thousands 2023 2022 2023 2022
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Operating profit 616 1,251 2,229 1,635
Amortisation of Intangible assets 329 280 - -
Share-based payments 1,284 104 - -
Depreciation 2,161 2,127 2,161 2,127
EBITDA 4,390 3,762 4,390 3,762
Note 4 - Segments
Six months ended 30 June 2023
Networking & Cyber Bio-Medical Unallocated Total
US$'000 US$'000 US$'000 US$'000
Revenues 13,288 46,882 - 60,170
Operating profit (1,389) 2,005 - 616
Net finance income 110
Profit before tax 726
Six months ended 30 June 2022
Networking & Cyber Bio-Medical Unallocated Total
US$'000 US$'000 US$'000 US$'000
Revenues 13,104 44,411 - 57,515
Operating profit (1,491) 2,742 - 1,251
Net finance expense (640)
Profit before tax 611
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
2023 2022
US$'000 US$'000
Unaudited Unaudited
Telecommunication products 10,033 7,355
Software services 3,255 5,750
Distribution of medical products 37,962 34,175
Diagnostic products 3,863 6,894
Eco-Med products 5,057 3,341
60,170 57,515
Note 6 - Other
On 1 January 2023, the Company granted a total of 17,663,306 options over
ordinary shares of 0.01 NIS each in the capital of the Company ("Ordinary
Shares") to the Chairman and CEO of the Company. The options were granted
under the BATM Advanced Communications Ltd. Global Share Incentive Plan (2021)
("SIP (2021)") after receiving the approval of shareholders at a general
meeting. In May 2023, the Company granted 2,110,894 options over Ordinary
Shares to a senior employee under the SIP (2021) plan.
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