REG - BATM Advanced Comm - Interim Results
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RNS Number : 6202V BATM Advanced Communications Ld 18 August 2025
LEI: 213800FLQUB9J289RU66
18 August 2025
BATM Advanced Communications Limited
("BATM" or "the Group")
Interim Results
BATM (LSE: BVC; TASE: BVC), a global provider of advanced network
infrastructure, cybersecurity and diagnostic technologies, announces its
interim results for the six months ended 30 June 2025.
Financial Summary*
$m H1 2025 H1 2024
Revenue 60.4 58.9
Gross profit 19.8 18.7
Gross margin 32.7% 31.7%
Adj. operating profit** 2.0 3.6
Adj. EBITDA** 4.0 5.7
Adj. profit before tax** 1.6 3.0
· Cash and short-term investments at 30 June 2025 were $27.0m (31
December 2024: $31.6m)
* Results for the Group's continuing operations. See note 4 to the
consolidated financial statements for details on the discontinued operations
**Adjusted to exclude amortisation of intangible assets, share-based payments
and exceptional expenses related to corporate activity
Operational Summary
· Strong H1 2025 performance, in line with management's expectations
o Further progress on the execution of the strategy, including the sale of
three non-core businesses
o Strategic actions implemented in 2024 are delivering results in core
divisions
BATM Networks
· BATM Networks returned to growth with an increase in revenue from both
carrier ethernet and Edgility
· Four new carrier ethernet products were launched in the X-series
portfolio, which are being well-received by the market, including an order
from a Tier 1 communication service provider in Mexico
· New channel partners were onboarded in all target markets globally for
the resale of the Group's carrier ethernet products and a customer partner
portal was launched
· Edgility was selected by Telebras, a leading Brazilian
telecommunications company, with a proof of concept currently underway with an
end customer
BATM Cyber
· Significant milestone achieved with the delivery of the first units of
a customised version of the Group's encryption platform for the commercial
market
· Sustained delivery of orders for the Group's long-standing government
customer, including the receipt of a new $1.5m order to develop advanced cyber
capabilities, which was subsequently increased to amount to $2.1m by period
end
BATM Diagnostics
· Achieved an increase in sales of proprietary and third-party diagnostic
products following the successful rollout of the new strategy to prioritise
reagent sales
· Entered the Italian market with MDXlab and won several projects, with a
number of these including multi-year reagent and consumable agreements
Commenting on the results, Moti Nagar, Chief Executive Officer of BATM, said:
"This has been an excellent six months of progress towards our strategic
goals. The action that we took last year is beginning to deliver results, with
a return to growth in BATM Networks and for our proprietary products in BATM
Diagnostics as well as an improvement in gross margin in all of our core
divisions. We achieved a major milestone in BATM Cyber with the delivery of
our first encryption platform for the commercial markets. At the same time, we
continued to execute on our strategy to become a more focused business with
the sale of three non-core activities during the period. Accordingly, we
exited the first half of 2025 in a much stronger position than when we
entered. With positive momentum having continued into the second half, we are
on track to deliver year-on-year growth for the full year."
Enquiries
BATM
Moti Nagar, Chief Executive Officer +972 9866 2525
Lior Miles, 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 Lior Miles, CFO, will be holding a webinar for analysts
and investors on 21 August 2025 at 1.00pm BST. To register to participate or
submit a question in advance, please use the following link:
https://forms.gle/8FNaWeZrvnUUyivm9 (https://forms.gle/8FNaWeZrvnUUyivm9)
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.
Operational Update
During the first six months of 2025, the Group continued to execute on its
strategy to focus on its core businesses - BATM Networks, BATM Cyber and BATM
Diagnostics - while also pursuing its strategy to dispose of non-core
activities. The Group achieved a return to growth in BATM Networks and an
increase in sales of both proprietary and third-party diagnostic products in
BATM Diagnostics following the management reorganisation and refocused
go-to-market approach adopted in those divisions in 2024. A key milestone was
reached in BATM Cyber with the delivery of the first units of the Group's
encryption platform for the commercial market. The Group also delivered an
improvement in gross margin in all three of its core divisions for the period,
in line with its strategy to pursue higher-margin activities.
The Group is exploring potential opportunities to add capability to its core
activities through M&A, and to divest its non-core businesses. This
resulted in the sale of three of its non-core businesses during the period.
This will reduce the Group's costs and ongoing commitments related to these
businesses as well as providing greater focus to the Group and supporting it
in reinvesting into its identified core strengths of networks, cybersecurity
and diagnostics to drive growth in these activities.
Further progress was made in transitioning the Group to operate as an
enterprise, including joint marketing and joint product development
initiatives between BATM Networks and BATM Cyber. In addition, the Group
undertook an in-depth exercise that resulted in the launch of a new brand
identity, including a new logo. The rebranding marks a significant milestone
in BATM's journey, as it aligns more closely with its strategic vision to
become a focused business and it brings its key activities under a unified
brand identity, with its operations now structured under the three divisions
of BATM Networks, BATM Cyber and BATM Diagnostics.
BATM Networks
$m H1 2025 H1 2024
Revenue 6.6 6.0
Gross margin* 44.4% 43.4%
Adj. operating loss* (1.1) (1.3)
* Adjusted to exclude amortisation of intangible assets, share-based payments
and exceptional expenses related to corporate activity
The performance of BATM Networks in the period reflects the initial results of
the decisive action taken during 2024 to return the division to growth,
including a management reorganisation, expansion of the sales & marketing
team and refocused go-to-market strategy. Accordingly, revenue increased by
11% to $6.6m and by 156% on a sequential basis compared with H2 2024. This
reflects an increase in revenue from sales of the Group's carrier ethernet
products as well as its Edgility edge virtualisation and management platform.
Gross margin increased by 100bps, despite ongoing pricing pressure, as a
result of an exercise undertaken to reduce production costs as well as the
lower cost of sales associated with the division's new products. The increase
in revenue and improved gross margin more than offset the higher operating
expenses associated the expanded sales team and enabled a reduction in
operating loss.
A key element of the Group's new go-to-market approach was the establishment
of a team to focus on expanding the Group's global channel partners, including
value-added resellers, systems integrators and distributors. The Group
successfully onboarded new channel partners in all of its target global
markets during the period, which have begun to resell the Group's carrier
ethernet products. In particular, the Group's X-series portfolio of carrier
ethernet products - with the first product being launched towards the end of
2024 and another four products being launched during the period - is proving
popular and is expected to make an important contribution to growth in the
second half of the year. To further strengthen its engagement with its
partners and customers, towards the end of the period the Group launched a
customer partner portal, which has already generated new business
opportunities.
In 2024, and continuing through the first half of 2025 with the hiring of
additional sales resources, the Group made a strategic investment in targeting
the Latin American market for its carrier ethernet and Edgility offerings.
This resulted in a Tier 1 communications service provider in Mexico purchasing
the Group's X-series of products - with the pipeline increasing for the second
half of the year.
Edgility was selected by Telecomunicações Brasileiras S.A. ("Telebras"), a
leading Brazilian telecommunications company that implements the federal
government's communication network and supports public broadband policies as
well as serving the enterprise market. Telebras is currently undertaking a
proof of concept with Edgility and an end customer, which the Group expects to
conclude in the second half.
The Group continued the rollout of Edgility under a three-year agreement
signed last year with a Tier 1 telecommunications company in Mexico to
provide Edgility to replace their incumbent network virtualisation solution.
The customer will deploy Edgility to fully virtualise, orchestrate and manage
at scale its enterprise connectivity services provided to enterprise and
small- to medium-sized businesses. During 2024, the Group received orders
worth over $2.4m, to be delivered over the three-year period.
The Group has also continued to expand its partnership with a leading global
provider of emergency connectivity services. The partner intends to continue
to expand its use of Edgility internationally, which includes having conducted
joint sales & marketing initiatives with the Group in Latin America.
BATM Cyber
$m H1 2025 H1 2024
Revenue 5.1 8.3
Gross margin* 52.6% 40.4%
Adj. operating profit* 1.0 2.5
* Adjusted to exclude amortisation of intangible assets, share-based payments
and exceptional expenses related to corporate activity
The performance of the BATM Cyber division for H1 2025 was in line with
management's expectations and compares with exceptional orders delivered in H1
2024 to the Group's long-standing government defence department customer. On a
sequential basis, comparing with the trading of H2 2024, BATM Cyber revenue
increased by 6%.
In 2024, the Group entered into a strategic partnership with a significant
global technology, engineering and defence group (the "Partner") to distribute
a customised version of the Group's advanced encryption platform, which is
quantum key distribution ready, to a variety of commercial markets and for
critical national infrastructure. A major milestone was achieved during the
period with the Group delivering the first units of its cyber solution to its
Partner, which will be used to support pilot and proof of concepts with
various potential customers.
The Group sought to leverage the resources across the business with certain
sales team members of the BATM Networks division beginning to promote the
Group's cyber solution with their commercial customers and partners. In
addition, the Group is undertaking joint product development initiatives
utilising both the Group's Edgility and encryption technology.
During the period, the Group received a further $1.5m order from its
long-standing customer for the development of next-generation cyber
capabilities, which was subsequently increased to amount to $2.1m by period
end. The Group also intends to apply similar functionality, once developed, to
its solution for the commercial markets, which will be a key differentiator
for BATM's platform.
BATM Diagnostics
$m H1 2025 H1 2024
Revenue 20.6 17.0
Gross margin* 30.2% 27.9%
Adj. operating profit* 1.0 0.3
* Adjusted to exclude amortisation of intangible assets, share-based payments
and exceptional expenses related to corporate activity
Revenue in the BATM Diagnostics division increased by 21%, with growth in
revenue of both the Group's proprietary diagnostic products and distributed
diagnostic products. The return to growth in sales of the Group's proprietary
diagnostic products reflects the early benefits from the management
reorganisation and refocused go-to-market approach adopted in the prior year
to prioritise reagent sales, which are a higher margin and consumable product.
The Group intends to provide its instruments on a lease basis, or as a
lower-margin sale, alongside a reagent agreement to secure long-term,
repeatable orders. With the higher contribution to revenue from reagent sales,
there was a significant improvement in gross margin, which, with a relatively
stable cost base, resulted in a substantial increase in adj. operating profit.
In particular, the Group was pleased to enter the Italian market with its
MDXlab molecular diagnostics instrument based on the real-time PCR method,
which offers an integrated, compact, cost-effective solution for small- to
medium-sized laboratories or point-of-care. The MDXlab is gaining good
traction and the Group won several projects that included multi-year reagent
and consumable agreements, in line with the refocused strategy.
ADOR Diagnostics ("ADOR"), an associate company of the Group that is
developing the disruptive NATlab molecular biology platform, continued to
undertake the pre-clinical validation phase for the platform. ADOR is
currently seeking to establish partnerships to support it in progressing to
the next phase of development.
Non-core Activities
$m (for continuing operations) H1 2025 H1 2024
Revenue 28.0 27.6
Gross margin* 28.9% 29.8%
Adj. operating profit* 1.0 2.0
* Adjusted to exclude amortisation of intangible assets, share-based payments
and exceptional expenses related to corporate activity
During the period, the Group made significant progress on executing on its
strategy to exit its non-core activities with the sale of three non-core
businesses, namely Celitron, its eco-med business in Hungary, Zer
Laboratories, an administrator of third-party pre-natal diagnostic tests in
Israel, and Progenetics, an administrator of third-party oncological
diagnostic tests in Israel. Celitron and Zer Laboratories had been lossmaking
for multiple years and Celitron had been classified earlier in the year as a
discontinued operation for the purpose of the Group's financial reporting.
The Group had readied these operations for sale and intended to close them, to
preserve the Group's cash resources, if a sale did not occur during 2025. By
securing the sale of these operations, the Group will significantly reduce its
costs and ongoing commitments related to these businesses. In addition,
Progenetics was sold for a total consideration of $2m for the Group's 51%
shareholding and the Group has received a total of c. $383k in cash in
consideration for the disposal of Celitron and Zer Laboratories.
The Group is continuing to seek further disposals of non-core businesses.
Financial Review
Adjusted* Reported
$m (for continuing operations**) H1 2025 H1 2024 H1 2025 H1 2024
Revenue 60.4 58.9 60.4 58.9
Gross margin 33.1% 32.1% 32.7% 31.7%
Operating profit 2.0 3.6 1.0 2.8
EBITDA 4.0 5.7 3.3 5.2
* Adjusted to exclude amortisation of intangible assets, share-based payments
and exceptional expenses related to corporate activity
** See note 4 to the consolidated financial statements
Total Group revenue increased to $60.4m (H1 2024: $58.9m). This reflects
growth in BATM Networks and BATM Diagnostics.
Gross profit increased to $19.8m (H1 2024: $18.7m) with a gross margin of
32.7% (H1 2024: 31.7%), with the improvement reflecting an increased margin in
all the Group's core divisions.
Sales and marketing expenses increased to $10.2m (H1 2024: $9.3m) reflecting
investment in go-to-market made in the prior year, general and administrative
expenses rose to $6.9m (H1 2024: $6.3m) and R&D expenses increased to
$2.5m (H1 2024: $2.3m), which primarily reflects the Group investing to
execute on its renewed strategy. The Group recognised net other operating
income of $0.7m, which is mainly attributed to the capital gain on the Group's
disposals. This compares with other operating income in H1 2024 of $2.0m,
which primarily reflects the contribution to H1 2024 of other operating income
generated from the revaluation of a liability.
Adjusted EBITDA, excluding amortisation of intangible assets, share-based
payments and exceptional expenses related to corporate activity, was $4.0m for
H1 2025 compared with $5.7m for the first half of the prior year. Adjusted
operating profit was $2.0m (H1 2024: $3.6m) due to the higher operating
expenses and the one-time operating income in H1 2024 of $2.0m. On a reported
basis, operating profit was $1.0m (H1 2024: $2.8m).
Profit before tax was $0.6m (H1 2024: $2.2m), as outlined above. On an
adjusted basis, the Group reported a profit of $1.6m (H1 2024: $3.0m).
The Group recorded a tax expense of $0.4m (H1 2024: $0.6m) and share of loss
of a joint venture and associated companies was $0.2m (H1 2024: $0.2m).
Net profit from continuing operations was $0.03m (H1 2024: $1.5m) and earnings
per share was 0.13¢ (H1 2024: 0.32¢).
The Group recorded a loss from discontinued operations of $4.3m (H1 2024:
$1.4m loss), primarily attributable to a non-cash loss arising from the
disposal of historical capital reserves related to foreign currency
translation (see note 4).
Net cash used in continuing operations (before tax and interest) was reduced
to $2.7m compared with $4.1m in H1 2024. This primarily reflects changes in
working capital.
The Group continues to have a strong balance sheet, with cash and short-term
investments at 30 June 2025 of $27.0m (31 December 2024: $31.6m; 30 June 2024:
$32.6m).
Outlook
BATM entered the second half of 2025 in a stronger position than at the same
point in the previous year. The strategic action taken in 2024 and in the
first six months of 2025 has strengthened the Group's core divisions, which
are experiencing positive momentum. In BATM Networks, the Group is on track to
deliver strong growth for FY 2025, driven by an increase in carrier ethernet
sales as well as growth in Edgility revenue. BATM Cyber continues to perform
in line with management's expectations, with revenue for FY 2025 anticipated
to be slightly lower than the prior year due to the exceptional contribution
in 2024 from the Group's long-standing government defence department customer.
In BATM Diagnostics, the Group is encouraged by the interest that it is
receiving for its own products and is delivering sustained growth in
third-party product sales. As a result, the Group expects to report a
year-on-year increase in revenue and adj. EBITDA for FY 2025.
The Group is continuing to execute on its strategy to become a focused
business through pursuing further disposals of non-core activities and
identifying potential M&A opportunities to accelerate growth in its core
divisions. Through these actions, combined with the successful delivery of the
Group's renewed go-to-market approach in BATM Networks and BATM Diagnostics as
well as entering the commercial market in BATM Cyber, the Board believes the
Group is well positioned to deliver on its strategic objectives and deliver
significant shareholder value.
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Continuing Operations
Six months ended
30 June
2025 2024
$'000 $'000
Unaudited Unaudited
Revenues 60,362 58,882
Cost of revenues 40,598 40,187
Gross profit 19,764 18,695
Operating expenses
Sales and marketing expenses 10,155 9,284
General and administrative expenses 6,860 6,333
Research and development expenses 2,464 2,272
Other operating income (735) (2,017)
Total operating expenses 18,744 15,872
Operating income 1,020 2,823
Finance income 382 319
Finance expenses (838) (961)
Profit before tax 564 2,181
Income tax expenses (364) (564)
Profit for the period before share of loss of a joint venture 200 1,617
and associated companies
Share of loss of a joint venture and associated companies 166 159
Profit for the period from continuing operations 34 1,458
Loss for the period from discontinued operations (4,286) (1,398)
Profit (Loss) for the period (4,252) 60
Attributable to:
Non-controlling interests (526) 58
Owners of the Company (3,726) 2
Earnings (loss) per share (in cents):
Basic and diluted from continuing operations 0.13 0.32
Basic and diluted from discontinued operations (0.98) (0.32)
Basic and diluted (0.85) (0.00)
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Six months ended 30 June
2025 2024
$'000 $'000
Unaudited Unaudited
Profit (loss) for the period (4,252) 60
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translating foreign operations 6,721 (3,119)
Disposal of a foreign operation 4,005 -
Total other comprehensive income (loss) for the period 10,726 (3,119)
Total comprehensive income (loss) for the period 6,474 (3,059)
Attributable to:
Owners of the Company from continuing operations 7,074 (1,446)
Owners of the Company from discontinued operations (296) (1,597)
Non-controlling interests (304) (16)
6,474 (3,059)
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
30 June 30 June 31 December
2025 2024 2024
$'000 $'000 $'000
Unaudited Unaudited Audited
Current assets
Cash and cash equivalents 21,384 27,176 25,898
Trade and other receivables 35,648 37,212 29,614
Short-term investment in deposits and other securities 5,649 5,417 5,672
Inventories 33,459 35,134 32,710
Disposal group Held for Sale - - 4,660
96,140 104,939 98,554
Non-current assets
Property, plant and equipment 12,719 14,592 12,016
Investment property 604 579 548
Right-of-use assets 4,093 5,587 4,178
Goodwill 3,344 12,690 3,344
Intangible assets 9,173 8,814 8,004
Investment in joint venture and associate 20,726 17,640 17,802
Investments carried at fair value 1,220 1,220 1,220
Deferred tax assets 3,602 3,478 3,498
55,481 64,600 50,610
Total assets 151,621 169,539 149,164
Current liabilities
Short-term bank credit 4,731 5,041 4,261
Trade and other payables 35,007 36,035 36,691
Current maturities of lease liabilities 1,956 2,027 2,032
Tax liabilities 500 100 619
Liabilities associated with disposal group Held for Sale - - 2,978
42,194 43,203 46,581
Non-current liabilities
Long-term liabilities 6,789 5,365 6,588
Long-term lease liabilities 2,474 3,631 2,358
Deferred tax liabilities 21 31 -
Retirement benefit obligation 759 617 655
10,043 9,644 9,601
Total liabilities 52,237 52,847 56,182
Equity
Share capital 1,320 1,320 1,320
Share premium account 430,058 429,089 429,598
Reserves (24,478) (32,910) (31,073)
Reserves associated with disposal group Held for Sale - - (3,620)
Accumulated deficit (306,131) (279,883) (302,162)
Equity attributable to the:
Owners of the Company 100,769 117,616 94,063
Non-controlling interests (1,385) (924) (1,081)
Total equity 99,384 116,692 92,982
Total equity and liabilities 151,621 169,539 149,164
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the six months ended 30 June 2025
Share premium account Other comprehensive income attributable to disposal groups Attributable to owners of the Company Non-controlling interests
Share capital Translation reserve Other Accumulated
Total
reserve
deficit equity
Balance as at 1 January 2025 1,320 429,598 (24,300) (6,773) (3,620) (302,162) 94,063 (1,081) 92,982
Profit for the period - - - - - (3,726) (3,726) (526) (4,252)
Exchange differences on translating foreign operations - - 6,884 - 3,620 - 10,504 222 10,726
Total comprehensive income (loss) for the period - - 6,884 - 3,620 (3,726) 6,778 (304) 6,474
Dividend to non-controlling interests holding put option - - - - - (243) (243) - (243)
Recognition of share-based payments - 460 - - - - 460 - 460
Capital reserve transactions with NCI - - - (289) - - (289) 947 658
Disposal of subsidiary - - - - - - - (947) (947)
Balance as at 30 June 2025 (unaudited) 1,320 430,058 (17,416) (7,062) - (306,131) 100,769 (1,385) 99,384
For the six months ended 30 June 2024
Share premium account Attributable to owners of the Company Non-controlling interests Total
Share capital Translation reserve Other Accumulated equity
reserve
deficit
Balance as at 1 January 2024 1,320 428,656 (23,092) (6,773) (279,767) 120,344 (908) 119,436
Profit for the period - - - - 2 2 58 60
Exchange differences on translating foreign operations - - (3,045) - - (3,045) (74) (3,119)
Total comprehensive income (loss) for the period - - (3,045) - 2 (3,043) (16) (3,059)
Dividend to non-controlling interests holding put option - - - - (118) (118) - (118)
Recognition of share-based payments - 433 - - - 433 - 433
Balance as at 30 June 2024 (unaudited) 1,320 429,089 (26,137) (6,773) (279,883) 117,616 (924) 116,692
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENT OF CASH FLOW
Six months ended 30 June
2025 2024
$'000 $'000
Unaudited Unaudited
Net cash used in continuing operating activities (Appendix A) (3,293) (4,803)
Net cash used in discontinued operating activities (25) (476)
Investing activities
Purchases of property, plant and equipment (816) (517)
Increase of intangible assets (1,216) (1,151)
Investment in joint venture and associated companies (793) (540)
Purchases of deposits and financial assets (4,608) -
Proceeds on disposal of deposits and securities 4,899 2,968
Proceeds on disposal of property, plant and equipment 140 557
Proceeds on disposal of operation, net (see note 3) 885 -
Net cash (used in) from investing activities - Continuing Operations (1,509) 1,317
Net cash from (used in) investing activities - Discontinued Operations 40 (4)
Financing activities
Lease payment (997) (958)
Bank loan repayment (2,848) (1,801)
Bank loan received 2,925 2,364
Dividend to non-controlling interests (243) (118)
Net cash used in financing activities - Continuing Operations (1,163) (513)
Net cash used in financing activities - Discontinued Operations (83) (118)
Net decrease in cash and cash equivalents (6,033) (4,597)
Cash and cash equivalents at the beginning of the period 25,898 32,339
Effects of exchange rate changes on the balance 1,519 (566)
of cash held in foreign currencies
Cash and cash equivalents at the end of the period 21,384 27,176
BATM ADVANCED COMMUNICATIONS LTD.
APPENDICES TO CONSOLIDATED STATEMENT OF CASH FLOW
APPENDIX A
Reconciliation of operating profit for the period to net cash from (used in)
operating activities:
Six months ended 30 June
2025 2024
$'000 $'000
Unaudited Unaudited
Operating profit from continuing operations 1,020 2,823
Adjustments for:
Amortisation of intangible assets 297 340
Depreciation of property, plant and equipment and investment property 2,023 2,083
Capital loss (gain) of property, plant and equipment 21 (230)
Share-based payments 460 433
Capital gain from disposal of operations (see note 3) (893) -
Operating cash flow before movements in working capital 2,928 5,449
(Increase) Decrease in inventory (791) 2,578
Increase in receivables (5,911) (5,860)
Decrease in payables (1,356) (4,225)
Effects of exchange rate changes on the balance sheet 2,431 (2,016)
Cash used in operations (2,699) (4,074)
Income taxes paid (572) (779)
Interest (paid)/received, net (22) 50
Net cash used in continuing operating activities (3,293) (4,803)
Net cash used in discontinued operating activities (25) (476)
BATM ADVANCED COMMUNICATIONS LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - General
These 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 2024 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 2024,
which have been prepared in accordance with International Financial Reporting
Standards.
Note 2 - Earnings per share
Earnings per share is based on the weighted average number of shares in issue
for the period of 441,026,659 (H1 2024: 440,684,134) 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 441,812,327 shares (H1 2024: 441,525,375).
Note 3 - Disposal of subsidiaries and operation
A. Disposal of Progenetics
On 15 May 2025, the Group completed the divestiture of its interest in
Progenetics resulting in the disposal of the assets and liabilities from the
consolidated balance sheet, and a gain on the disposal was recognised in the
consolidated statement of income, reflecting the difference between the
consideration received and the carrying amount of the net assets and
non-controlling interest ("NCI") disposed.
30 June
2025
$'000
Unaudited
Net assets disposed
Assets associated with disposal group Held for Sale 2,015
Liabilities associated with disposal group Held for Sale (948)
Non-Controlling interest (947)
Net assets disposed 120
Disposal of a capital reserves related to currency translation of a foreign 15
operation
Gain on disposal 760
Net consideration 895
Net cash inflow arising from disposal
Consideration received in cash, net 1,619
Cash held in escrow 143
Cash and cash equivalents disposed (867)
Net consideration 895
B. Disposal of Celitron
On 30 June 2025, the Group completed the divestiture of its interest in
Celitron resulting in the disposal of the assets and liabilities from the
consolidated balance sheet, and a gain on the disposal was recognised in the
consolidated statement of income, reflecting the difference between the
consideration received and the carrying amount of the net assets disposed.
30 June
2025
$'000
Unaudited
Net assets disposed
Assets associated with disposal group Held for Sale 1,235
Liabilities associated with disposal group Held for Sale (1,847)
Net assets disposed of (612)
Disposal of a capital reserves related to currency translation of a foreign 3,990
operation
Loss on disposal (3,138)
Total consideration 240
Net cash inflow arising from disposal
Consideration received in cash and cash equivalents, net 50
Deferred consideration 200
Cash and cash equivalents disposed (10)
Total consideration 240
C. On 30 June 2025, the Group completed the divestiture of the Zer
Laboratories operation for a total consideration amounting to $0.1m.
Note 4 - Discontinued operations
During 2024, the Board resolved to dispose of the eco-med operation, which
constitutes part of the Group's non-core segment. The operation, which was
expected to be sold within 12 months and had been classified as a discontinued
operation, was sold on 30 June 2025 (see note 3). The comparative consolidated
statement of profit or loss and the cash flow has been re-presented to show
the discontinued operation separately from the continuing operations.
During 2024, a claim with respect to the discontinued operation was pending
regarding alleged breach of contract to supply products and resulting damages.
To the extent that the management, based on the advice of its consultants,
predicts that the claim may result in a required outflow of funds from the
Group, the management, based on the advice of its legal advisers, is of the
opinion that an adequate provision was made in the financial statements.
The results of the discontinued operation are as follows:
Six months ended 30 June (Unaudited)
2025 2024
$'000s $'000s
Revenues 519 1,158
Expenses from operation 1,667 2,552
Loss from discontinued operation (1,148) (1,394)
Loss from disposal of discontinued operation (3,138) -
Tax expenses - 4
Loss for the period attributable to discontinued operations (4,286) (1,398)
Note 5 - Other alternative measures
The information set out below is for continuing operations:
Six months ended 30 June 2025 (Unaudited) Reported results Adjustments* Adjusted results
US$ thousands
Gross profit 19,764 200 19,964
Gross margin (%) 32.7% - 33.1%
Operating profit 1,020 987 2,007
EBITDA 3,340 690 4,030
Six months ended 30 June 2024 (Unaudited) Reported results Adjustments* Adjusted results
US$ thousands
Gross profit 18,695 216 18,911
Gross margin (%) 31.7% - 32.1%
Operating profit 2,823 773 3,596
EBITDA 5,246 433 5,679
(*) Adjusted to exclude amortisation of intangible assets, share-based
payments and exceptional expenses related to corporate activity
EBITDA measurement
Six months ended 30 June
2025 2024
$'000 $'000
Unaudited Unaudited
Operating profit 1,020 2,823
Amortisation of intangible assets 297 340
Share-based payments 460 433
Depreciation 2,023 2,083
Exceptional expenses related to corporate activity 230 -
Adj. EBITDA 4,030 5,679
Note 6 - Business segments
Operational segments are identified on the basis of internal reports about the
Group's components that are reviewed by the chief 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 and the operating profit.
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 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. Non-core - 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 segment information reported below is for continuing operations.
Six months ended 30 June 2025 (Unaudited)
Networks Cyber Diagnostics $'000 Non-core $'000 Total
$'000 $'000 $'000
Revenues 6,621 5,121 20,612 28,008 60,362
Gross profit 2,782 2,696 6,182 8,104 19,764
Operating profit/(loss) (1,422) 790 727 925 1,020
Net finance expenses (456)
Profit before tax 564
Six months ended 30 June 2024 (Unaudited)
Networks Cyber Diagnostics $'000 Non-core $'000 Total
$'000 $'000 $'000
Revenues 5,964 8,291 17,026 27,601 58,882
Gross profit 2,416 3,347 4,701 8,231 18,695
Operating profit/(loss) (1,582) 2,373 90 1,942 2,823
Net finance expenses (642)
Profit before tax 2,181
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