REG - MTI Wireless Edge - Final Results
17/03/2025 07:00
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RNS Number : 8307A MTI Wireless Edge Limited 17 March 2025
17 March 2025
MTI Wireless Edge Ltd
("MTI" or the "Group")
Final Results
Record Order Backlog and Expected Defence Spending Increases Underpin Strong
Outlook
MTI Wireless Edge Ltd (AIM: MWE), the technology group focused on
comprehensive communication and radio frequency solutions across multiple
sectors, is pleased to announce its audited results for the year ended 31
December 2024.
Moni Borovitz, Chief Executive Officer of MTI Wireless Edge, said: "We are
proud of these results which show good progress during a period of extremely
difficult conditions in Israel. The business again proved its resilience,
operating largely as normal and our target end-markets remain buoyant. In
particular, the increase in defence budgets worldwide and the opening of the
Indian market for E-Band 5G backhaul present substantial opportunities for us
over the medium term.
Fundamentally, our core business remains strong, with three well established
and well-led divisions focused on three substantial growth markets, all of
which leverage the Group's core expertise in radio frequency communications
technology.
Looking ahead, the business is in an excellent financial position with net
cash of US$6m at the year end, even after investing approximately US$1.3m in
our own shares under the buyback programme. Furthermore, we believe we are
well placed for 2025, given the size of our record order backlog which stands
at over US$25m and the anticipated global increase in defence spending."
Forecasted European Defence Spending
Financial Highlights
· Revenues held up well at US$45.6m (2023: US$45.6m) in a very
challenging environment
· Profit from operations decreased 3% to US$4.51m (2023: US$4.65m)
· Profit before tax similar to last year at US$4.81m (2023: US$4.84m)
· Net Profit increased 3% to US$4.2m (2023: US$4.1m)
· Earnings per share increased by 9% to 4.99 US cents (2023: 4.58 US
cents)
· Net cash of US$6.0m at 31 December 2024 (31 December 2023: US$8.1m)
following purchase of 2.3m shares in the Company under the buyback programme
· Increased final dividend by 6% to 3.3 US cents per share (2023: 3.1
US cents per share)
Divisional Highlights
· Antennas - an excellent year for this division with 16% revenue
growth in 2024 and the prospect of increasing revenues in 2025. Sales of 5G
backhaul solutions and the ABS® antenna solution doubled in 2024 while
revenue from military antennas increased due to demand from both local and
international markets, leading to a 56% rise in the division's operating
profits.
· Water management - revenue reduced by 2% due to slower activity in
some international markets, however, increased revenue from higher margin
services together with the impact of price increases led to a 16% rise in the
division's operating profit. Water scarcity continues to be a critical
issue, driving demand for Mottech's expanding product range, from both
existing clients and new customers in new markets.
· Distribution - revenue was 11% lower compared to 2023. Primarily due
to a weak performance by PSK which led to a significant reduction in the
division's operating profits. However, this division, including PSK, began
2025 with a very healthy order backlog and a long pipeline of opportunities
driven by Governments seeking to increase their investment in defence. The
issues with PSK are being resolved, making the prospects for this division
quite promising.
Shareholder presentation
Moni Borovitz, Chief Executive Officer, will provide an investor presentation
relating to the Company's financial results for the year ended 31 December
2024 via the Investor Meet Company ("IMC") platform on 19 March 2025 at 13:30
GMT.
Investors can sign up for free via:
https://www.investormeetcompany.com/mti-wireless-edge-ltd/register-investor
(https://www.investormeetcompany.com/mti-wireless-edge-ltd/register-investor)
Investors who have already registered on IMC and added to meet the Company,
will be automatically invited to the meeting.
Annual Report
Shareholders should note that the Company will not post hard copies of its
audited annual report and accounts for the year ended 31 December 2024 (the
"Annual Report") to its shareholders. Shareholders who require a hard copy
of the Annual Report may write to the Company at MTI Wireless Edge Ltd
Headquarters, 11 Hamelacha St. Afek Industrial Park, Rosh-Ha'Ayin, Israel
requesting a hard copy. An electronic version of the Annual Report will
shortly be available on the Company's website at the following address:
www.mtiwirelessedge.com (http://www.mtiwirelessedge.com/)
For further information please contact:
MTI Wireless Edge Ltd +972 3 900 8900
Moni Borovitz, CEO http://www.mtiwirelessedge.com
(https://url.avanan.click/v2/___http:/www.mtiwirelessedge.com___.YXAxZTpzaG9yZWNhcDphOm86NTA2ODhlYzU1NzE3NDg0YWIzZWExMDljN2E2YzQ4OGI6NjpiY2U0OjY0MDM5MmE2YTliMzA5MjU1YWJkOGUzMGQwZGExNDU5NjYxOWYwNGY3YzYxMTY2NGRkODU2YzQxMzhkZTc4MTY6cDpUOk4)
Allenby Capital Limited (Nomad and Joint Broker) +44 20 3328 5656
Nick Naylor/Alex Brearley/Piers Shimwell (Corporate Finance)
Guy McDougall/Amrit Nahal (Sales and Corporate Broking)
Shore Capital (Joint Broker) +44 20 7408 4090
Toby Gibbs/Rachel Goldstein (Corporate Advisory)
Fiona Conroy (Corporate Broking)
Novella (Financial PR) +44 20 3151 7008
Tim Robertson/Safia Colebrook
About MTI Wireless Edge Ltd. ("MTI")
Headquartered in Israel, MTI is a technology group focused on comprehensive
communication and radio frequency solutions across multiple sectors through
three core divisions:
Antenna division
MTI is a world leader in the design, development and production of high
quality, state-of-the-art, and cost-effective antenna solutions including
Smart Antennas, MIMO Antennas and Dual Polarity Antennas for wireless
applications. MTI supplies antennas for both military and commercial markets
from 100 KHz to 174 GHz.
Internationally recognized as a producer of commercial off-the-shelf and
custom-developed antenna solutions in a broad frequency range, MTI addresses
both commercial and military applications.
MTI supplies directional and omnidirectional antennas for outdoor and indoor
deployments, including smart antennas for 5G backhaul, Broadband access,
public safety, RFID, base station and terminals for the utility market.
Military applications include a wide range of broadband, tactical and
specialized communication antennas, antenna systems and DF arrays installed on
numerous airborne, ground and naval, including submarine, platforms worldwide.
Water Control & Management division
Via its subsidiary, Mottech Water Solutions Ltd ("Mottech"), MTI provides
high-end remote control and monitoring solutions for water and irrigation
applications based on Motorola's IRRInet state-of-the-art control, monitoring
and communication technologies.
As Motorola's global prime-distributor Mottech serves its customers worldwide
through its international subsidiaries and a global network of local
distributors and representatives. With over 25 years of experience in
providing customers with irrigation remote control and management, Mottech's
solutions ensure constant, reliable and accurate water usage, increase crops
quality and yield while reducing operational and maintenance costs providing
fast ROI while helping sustain the environment. Mottech's activities are
focused in the market segments of agriculture, water distribution, municipal
and commercial landscape as well as wastewater and storm-water reuse.
Distribution & Professional Consulting Services division
Via its subsidiary, MTI Summit Electronics Ltd., MTI offers consulting,
representation and marketing services to foreign companies in the field of RF
and Microwave solutions and applications including engineering services
(including design and integration) in the field of aerostat systems and the
ongoing operation of Platform subsystems, SIGINT, RADAR, communication and
observation systems which is performed by the Company. It also specializes in
the development, manufacture and integration of communication systems and
advanced monitoring and control systems for the Government and defence
industry market.
Chairman's statement
2024 was a challenging year, given the ongoing conflict and unsettled markets
but despite this, the business performed resiliently and finished the period
in a strong position. We secured a number of new contracts throughout the year
with both new and existing customers and as a result we have a larger backlog
of orders than we have ever had before.
Furthermore, demand across our three core markets remains high and is expected
to grow. The defence sector is showing very positive momentum, and when
coupled with the global adoption of 5G and the continuing need for water
management solutions, this creates a solid foundation for future demand for
the Group's services.
Trading overview
Unsurprisingly, the dominant market driver in 2024 was defence spending and
this is likely to be true in 2025 too. The defence market, which was already
expanding, is now poised for even greater growth due to actions taken by the
new US government. In response, European governments have unveiled plans for
significantly increased defence spending, and MTI is well-positioned to
benefit. Enquiries for military related orders (both for military antennas and
distribution of components, including PSK's solution offerings) have increased
to support expanded budgets and our pipeline of potential orders is higher
than we have ever seen.
Dividend
Reflecting the strength of the Company's operational performance and order
backlog and pipeline the Board is pleased to declare a final dividend of
US$0.033 per share representing a 6% increase on the previous year (2024:
US$0.031). The dividend will be paid on 11 April 2025 to shareholders on the
register at the close of trading on 28 March 2025 (ex-dividend on 27 March
2025). The currency translation into British Pounds will be made on 2 April
2025 and there will not be a scrip dividend alternative.
We have also decided to maintain the Company's share buyback programme and
continue holding the shares purchased for a longer period. The Board has
agreed to use the existing funding committed to the buyback programme, along
with the dividends received from the shares in treasury, to continue the
programme until the end of March 2026, reflecting our strong confidence in the
business' prospects.
People
The MTI teams worldwide performed exceptionally well throughout the year,
maintaining high operational performance levels and delivering margin
progression in the the antenna division and Mottech. I would like to extend a
special thank you to our teams in Israel for their excellent work during what
has undoubtedly been the most challenging year in the country's history. Their
dedication, solidarity and unwavering focus was crucial in helping us navigate
this very difficult period.
Outlook
MTI is a growth business operating in growth markets. Our products and
services are in demand across all three divisions. We continue to invest in
innovation, product development and acquisitions when the opportunities arise,
whilst always remaining focused on radio frequency communications which lies
at the heart of our success.
2025 has undoubtedly started well for the Company with an increased backlog
and pipeline of opportunities across all of our three divisions. We are
therefore looking forward to delivering a year of growth and increased returns
for our shareholders.
Zvi Borovitz
Chairman
Chief Executive's review
Introduction
2024 was a challenging, yet successful year for the Company. Despite the
conflict, the Company continued to operate smoothly, achieving many of its
commercial targets. As a result, the business maintained revenue levels and
achieved an increase in net profits. Mottech and the Antenna division both
contributed strongly to the profitability of the business, while the
Distribution division was held back by a weak performance from PSK. The issues
at PSK are being resolved which once completed, together with the record Group
order backlog, will put the Company in a prime position for a good year in
2025.
Financial results
Revenues for the twelve months to 31 December 2024 were maintained at US$45.6m
(2023: US$45.6m) with the key 5G backhaul and military markets driving growth
in the Antenna division, offsetting the decline in revenues from PSK.
Gross margin was 1% below last year reflecting the mix of products sold in
different markets and the costs incurred in PSK. Gross margin in both the
antenna division and Mottech improved in 2024 demonstrating the scalability of
our business.
Operating profit in 2024, was 3% lower at US$4.51m (2023: US$4.65m), as a
result of the losses in PSK while both the Antenna division and Mottech showed
significant increases in operating profits.
Profit before tax was US$4.8m (2023: US$4.8m) reflecting the strength of our
balance sheet's financial income gained from deposits as well as a result of
writing off part of the contingent liability relating to the potential
deferred consideration for the PSK acquisition which was based on PSK's 2024
target results which were not achieved.
Net Profit to shareholders increased 8% led by lower tax rates and helped by
the share repurchase programme, while earnings per share grew 9% to US4.99
cents (2023: US4.58 cents).
Cash flow generated from operations for 2024 was US$3.1m, similar to 2023
(US$3.6m) reflecting some minor delays in collections, which moved into
January 2025, and was generally in line with our business model to convert the
majority of operating profits into operating cash flow. This resulted in a net
cash balance of approximately US$6m (31 December 2023: US$8.1m), following the
spending of US$1.3m to purchase the Company's shares under the Share
Repurchase Programme.
The Board has agreed to continue with the Share Repurchase Programme (on
similar terms and conditions originally announced by the Company on 13 April
2022) and extend it until 31 March 2026.
Operational review
Over the last 54 years MTI has established its reputation as a global provider
of comprehensive radio frequency solutions across multiple sectors through
three core divisions.
Antennas
This division is a one stop shop for the sale of 'off the shelf' flat and
parabolic antennas, combined with the provision of custom-developed antenna
solutions to a range of commercial and military customers, with a growing
focus on providing 5G backhaul antenna solutions to support mobile phone
operators as they roll-out their 5G networks.
In 2024, revenues from this division increased by 16%, which is considered a
good result, reflecting a sharp increase in demand for 5G backhaul antenna
solutions and increases in military antennas, combined with a moderate
decrease in legacy antennas for fixed wireless access and slower Radio
Frequency Identification (RFID) sales. Overall, this combined to produce a 56%
rise in divisional operating profit.
E-Band 5G backhaul antenna sales doubled in 2024 compared to 2023 as a result
of better installation rates in key markets, which bodes well for future sales
of our 5G solutions.
Our investment in expanding our physical presence in India is paying off,
serving as a key driver of 5G sales. The quality and reliability of MTI's
products and solutions, which are core strengths, further differentiated us
from competitors. As a result, we have earned, and continue to build, trust
with India's leading mobile operators and OEM suppliers. This reinforces our
belief that our solutions are well-positioned to generate significant
long-term revenues as 5G networks are rolled out both in India and globally by
major mobile operators.
Military antenna sales increased moderately in 2024 following a significant
increase in 2023, reflecting very high enquiry levels and a significant rise
in global military spending. Demand came from multiple international and local
projects, including sales to defence companies in Europe. In many cases MTI's
solutions are sold globally via Israeli defence companies exporting
larger-scale solutions. Moreover, in 2024 there was a growing trend amongst
Israel's defence companies to outsource military antenna manufacturing -
creating new revenue opportunities for MTI, the benefit of which will come
through in future years.
The conflicts in the Middle East have triggered a need to restock antennas
used during these conflicts, and a requirement to maintain higher stock
levels, which will change the overall volume of antennas needed.
Critically, the E-Band 5G backhaul antenna and military antenna segments
together accounted for 70% of our antenna revenues in 2024, which is promising
for the future as we expect these areas to experience the strongest growth
moving forward.
Water Control & Management
This division provides wireless control systems to manage irrigation and water
distribution for agriculture, municipal authorities and commercial entities.
It operates under the Mottech brand and utilises part of the hardware
technology from Motorola, integrated with the Company's own proprietary
solutions, including management software. Our solutions reduce water and power
usage, whilst providing higher revenue from accurate irrigation, leading to an
increased number and improved quality of crops being cultivated.
Mottech had another good year, although revenue declined by 2% primarily due
to some projects and orders in Europe being delayed, together with some
planned installations being slow to occur in Israel due to the conflict.
Nevertheless, the increased revenue from higher margin services, and new
pricing initiated in 2023 helped improve profit margins, resulting in
operating profit improving by 16%. Recurring revenues continued to improve and
represented over 25% of the division's income in 2024.
Mottech always continues to seek to innovate and expand its services to
existing and new clients. For over 30 years, Mottech has been providing
irrigation services to a number of municipalities in Israel, ensuring
efficient water usage across public parkland and green open spaces. Despite
the conflict, the division continued to secure new mandates, including for
comprehensive encrypted fountain management solutions, such as winning the
contract to manage Jerusalem's fountains in 2024. Implementation of this
solution began last year with further installations to be completed in 2025.
Mottech also introduced new hardware solutions, increasing its offering to
existing, new and potential customers. These solutions, including the Elite
controller, are also aimed at opening fresh market opportunities which we
anticipate will become part of future growth drivers.
Droughts fuelled by human destruction of the environment are projected to
affect 3 in 4 people by 2050, highlighting how investing in sustainable land
and water management is essential to mitigate the issue, which currently
incurs over US$307billion per year in global costs, according to a new report
launched at the Conference of the Parties of the United Nations Convention to
Combat Desertification (UNCCD)*.
This level of challenge underlines the importance of water conservation and
how solutions like Mottech's can make a substantial difference - often able to
save a farmer or a city up to 30% in water usage, while helping the farmer to
grow more crops at a better level of quality.
*UN economics of drought - December 2024
Distribution & Professional Consulting Services
Operating under the MTI Summit Electronics brand ("MTI Summit"), this division
exclusively represents approximately 40 international suppliers of radio
frequency/microwave components and sells these products to Israeli customers.
Expert knowledge of both the international suppliers and customers enables MTI
to act as a consultant to all parties and assist with devising complete radio
frequency/microwave solutions.
2024 was a mixed year for MTI Summit, after nine years of delivering
uninterrupted growth, revenues were lower by 11% compared to 2023 mainly due
to a weak performance by PSK.
During the second half of 2024, changes were implemented at PSK to seek to
avoid such losses being repeated. A larger part of PSK's work is now
subcontracted, rather than performed in-house, providing more flexibility when
project levels are lower. Given the existing order backlog and robust pipeline
of opportunities for both PSK and MTI Summit, the Company believes in the
division's prospects.
For MTI Summit and PSK, the increased defence spending by governments globally
creates a very positive market environment in which to operate. A key factor
behind the order backlog for 2025 as well as the future pipeline of
opportunities, is the mix of direct domestic demand and international demand
via Israeli defence companies.
Outlook
Global conflicts have led to a significant increase in defence budgets which
began impacting MTI's results in 2023 and continued into 2024 with over 40% of
the Group's sales now being defence related. We expect this trend to continue
in the medium term, supported by the current high backlog of orders, and a
significant pipeline of opportunities.
Overall, MTI is well positioned across all three divisions, each benefitting
from strong macro trends underpinning future prosperity. The first two months
of 2025 have been in line with internal expectations and judging from the
pipeline of potential opportunities, the Group is well placed, to continue to
seek to expand through a mix of organic and acquisition-led growth, supported
by a strong financial foundation.
Moni Borovitz
Chief Executive Officer
M.T.I Wireless Edge Ltd.
Consolidated Statements of Comprehensive Income
For the year ended December 31,
2024 2023
Note $'000 $'000
Revenues 4, 6 45,573 45,634
Cost of sales 31,370 30,963
Gross profit 14,203 14,671
Research and development expenses 1,016 1,047
Distribution expenses 3,413 3,709
General and administrative expenses 5,321 5,278
Profit from sale of property, plant and equipment 59 13
Profit from operations 5 4,512 4,650
Finance expense 7 282 342
Finance income 7 (582) (527)
Profit before income tax 4,812 4,835
Tax expenses 8 619 759
Profit 4,193 4,076
Other comprehensive income (loss) net of tax:
Items that will not be reclassified to profit or loss:
Remeasurements on defined benefit plans 16 62
Items that may be reclassified to profit or loss:
Adjustment arising from translation of financial statements of foreign (149) (216)
operations
Total other comprehensive (loss) (133) (154)
Total comprehensive income 4,060 3,922
Profit attributable to:
Owners of the parent 4,364 4,045
Non-controlling interest (171) 31
4,193 4,076
Total comprehensive income attributable to:
Owners of the parent 4,231 3,891
Non-controlling interest (171) 31
4,060 3,922
Earnings per share
Basic and diluted (dollars per share) 9 0.0499 0.0458
The accompanying notes form an integral part of these financial statements.
M.T.I Wireless Edge Ltd.
Consolidated Statements of Changes in Equity
For the year ended December 31, 2024 :
Attributable to owners of the parent
Share capital Additional paid-in capital Translation differences Retained earnings Total attributable to owners of the parent Non-controlling interests Total equity
U.S. $ in thousands
Balance as at January 1, 2024 209 23,061 (466) 5,226 28,030 1,222 29,252
Changes during 2024:
Comprehensive income
Profit for the year - - - 4,364 4,364 (171) 4,193
Other comprehensive income (loss)
Re measurements on defined benefit plans - - - 16 16 - 16
Translation differences - - (149) - (149) - (149)
Total comprehensive income (loss) for the year - - (149) 4,380 4,231 (171) 4,060
Dividend - - - (2,745) (2,745) - (2,745)
Share based payment - 106 - - 106 - 106
Acquisition and disposal, net of treasury shares (note 23) - (1,165) - - (1,165) - (1,165)
Balance as at December 31, 2024 209 22,022 (615) 6,861 28,457 1,051 29,508
The accompanying notes form an integral part of these financial statements.
M.T.I Wireless Edge Ltd.
Consolidated Statements of Changes in Equity (Cont.)
For the year ended December 31, 2023 :
Attributable to owners of the parent
Share capital Additional paid-in capital Translation differences Retained earnings Total attributable to owners of the parent Non-controlling interests Total equity
U.S. $ in thousands
Balance as at January 1, 2023 209 23,078 (250) 3,775 26,812 1,226 28,038
Changes during 2023:
Comprehensive income
Profit for the year - - - 4,045 4,045 31 4,076
Other comprehensive income (loss)
Re measurements on defined benefit plans - - - 62 62 - 62
Translation differences - - (216) - (216) - (216)
Total comprehensive income (loss) for the year - - (216) 4,107 3,891 31 3,922
Dividend - - - (2,656) (2,656) - (2,656)
Acquisition of minority holdings in subsidiary - - - - - (35) (35)
Acquisition and disposal, net of treasury shares (note 23) - (17) - - (17) - (17)
Balance as at December 31, 2023 209 23,061 (466) 5,226 28,030 1,222 29,252
The accompanying notes form an integral part of the financial statements.
M.T.I Wireless Edge Ltd.
Consolidated Statements of Financial Position
As at December 31, As at December 31,
2024 2024 2023 2023
Note $'000 $'000 $'000 $'000
ASSETS
Non-current assets :
Property, plant and equipment 11 5,584 5,398
Customer relations 12 1,280 1,439
Goodwill 12 2,068 2,068
Deferred tax assets 13 1,187 968
Long-term prepaid expenses 34 37
Total non-current assets 10,153 9,910
Current assets:
Inventories 14 8,168 7,484
Current tax receivables 297 381
Unbilled revenue 15 3,200 4,190
Trade and other receivables 15 16,726 14,284
Cash and cash equivalents 16 6,269 8,454
Total current assets 34,660 34,793
TOTAL ASSETS 44,813 44,703
LIABILITIES
Non-curent liabilities :
Contingent consideration and Put option liability 3 837 1,117
Lease liabilities, net of current maturities 11 601 514
Loans from banks, net of current maturities 17 37 64
Employee benefits, net 18 770 719
Total non-current liabilities 2,245 2,414
Current Liabilities:
Current tax payables 255 283
Trade and other payables 19 12,531 12,440
Current maturities and short-term bank credit 20 274 314
Total current liabilities 13,060 13,037
Total liabilities 15,305 15,451
TOTAL NET ASSETS 29,508 29,252
The accompanying notes form an integral part of these financial statements.
M.T.I Wireless Edge Ltd.
Consolidated Statements of Financial Position (Cont.)
As at December 31, As at December 31,
2024 2024 2023 2023
Note $'000 $'000 $'000 $'000
Capital and reserves attributable to 23
owners of the parent
Share capital 209 209
Additional paid-in capital 22,002 23,061
Translation differences (615) (466)
Retained earnings 6,861 5,226
28,457 28,030
Non-controlling interests 1,051 1,222
TOTAL EQUITY 29,508 29,252
The financial statements on pages 4 to 40 were approved by the Board of
Directors and authorised for issue on March 16, 2025, and were signed on its
behalf by:
March 16, 2025
Date of approval Moshe Borovitz Elhanan Zeira Zvi Borovitz
of financial statements Chief Executive Officer Controller Chairman of the Board
The accompanying notes form an integral part of these financial statements.
M.T.I Wireless Edge Ltd.
Consolidated Statements of Cash Flows
For the year ended December 31, For the year ended December 31,
2024 2024 2023 2023
$'000 $'000 $'000 $'000
Operating Activities:
Profit for the year 4,193 4,076
Adjustments for:
Depreciation and amortization 1,370 1,511
Equity settled share-based payment expense 106 -
Loss (Gain) on disposal of property, plant and equipment (26) (13)
Changes in Contingent consideration and Put option liability (280) (315)
Finance Income, net (180) (5)
Income tax expense 619 759
5,802 6,013
Changes in working capital and provisions
Decrease (increase) in inventories (749) 158
(Increase) in trade receivables (2,171) (2,477)
(Increase) decrease in unbilled revenues 990 (1,986)
(Increase) in other accounts receivables (319) (897)
Increase in trade and other accounts payables 192 3,228
Increase (Decrease) in employee benefits, net 67 29
(1,990) (1,945)
Interest received 109 69
Interest paid (79) (59)
Income tax paid (780) (540)
(750) (530)
Net cash provided by operating activities 3,062 3,538
The accompanying notes form an integral part of these financial statements.
M.T.I Wireless Edge Ltd.
Consolidated Statements of Cash Flows (Cont.)
For the year ended December 31, For the year ended December 31,
2024 2024 2023 2023
$'000 $'000 $'000 $'000
Investing Activities:
Proceeds from sale of property, plant and equipment 56 62
Purchase of property, plant and equipment (891) (426)
Net cash used in investing activities (835) (364)
Financing Activities:
Dividend (2,745) (2,656)
Payments of lease liabilities (364) (485)
Treasury shares acquired (1,165) (516)
Treasury shares sold - 499
Acquisition of the non-controlling interest in subsidiary - (35)
Repayment of long-term loans from banks (101) (247)
Receipt of loans from banks 14 460
Net cash used in financing activities (4,361) (2,980)
Increase (Decrease) in cash and cash equivalents (2,134) 194
Cash and cash equivalents at the beginning of the year 8,454 8,279
Exchange differences on balances of cash and cash equivalents (51) (19)
Cash and cash equivalents at the end of the year 6,269 8,454
(364)
(485)
Treasury shares acquired
(1,165)
(516)
Treasury shares sold
-
499
Acquisition of the non-controlling interest in subsidiary
-
(35)
Repayment of long-term loans from banks
(101)
(247)
Receipt of loans from banks
14
460
Net cash used in financing activities
(4,361)
(2,980)
Increase (Decrease) in cash and cash equivalents
(2,134)
194
Cash and cash equivalents at the beginning of the year
8,454
8,279
Exchange differences on balances of cash and cash equivalents
(51)
(19)
Cash and cash equivalents at the end of the year
6,269
8,454
The accompanying notes form an integral part of these financial statements.
M.T.I Wireless Edge Ltd.
Notes forming part of the consolidated financial statements for the year ended
December 31, 2024
1. General description of the Group and its operations
M.T.I Wireless Edge Ltd. (hereafter - the "Company", or collectively with its
subsidiaries, the "Group") is an Israeli corporation. The Company was
incorporated under the Companies Act in Israel on December 30, 1998 and
commenced operations on July 1, 2000. Since March 2006, the Company's shares
have been traded on the AIM market of the London Stock Exchange.
The formal address of the Company is 11 Hamelacha Street, Afek industrial
Park, Rosh-Ha'Ayin, Israel.
The Company and its subsidiaries are engaged in the following areas:
- Development, design, manufacture and marketing of antennas for the
military and civilian sectors.
- A leading provider of remote control solutions for water and
irrigation applications based on Motorola's IRRInet state of the art control,
monitoring and communication technologies.
- Providing consulting, representation and marketing services to
foreign companies in the field of radio frequency (RF) and Microwave,
including engineering services in the field of aerostat systems and system
engineering services, together with the development, manufacture and
integration of communication systems and advanced monitoring and control
systems for the Government and defence industry market.
2. Accounting policies
The principal accounting policies adopted in the preparation of the financial
statements are set out below. The policies have been consistently applied to
all the years presented, unless otherwise stated.
A. Basis of preparation
These consolidated financial statements have been prepared in accordance with
IFRS Accounting Standards as issued by the International Accounting Standards
Board (IFRS Accounting Standards). The financial statements have been prepared
under the historical cost convention, except for the measurement of employee
benefit plan assets.
The Company has elected to present the statement of comprehensive income using
the function of expense method.
B. Estimates and assumptions
The preparation of the financial statements requires management to make
estimates and assumptions that have an effect on the application of the
accounting policies and on the reported amounts of assets, liabilities,
revenues and expenses. These estimates and underlying assumptions are reviewed
regularly. Changes in accounting estimates are reported in the period of the
change in estimate and thereafter.
The key assumptions made in the financial statements concerning uncertainties
at the end of the reporting period and the critical estimates used by the
Group that may result in a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
- Deferred tax assets: Deferred tax assets are recognized for
unused carryforward tax losses and deductible temporary differences to the
extent that it is probable that taxable profit will be available against which
the losses can be utilized. Significant management judgment is required to
determine the amount of deferred tax assets that can be recognized, based upon
the estimated timing and the level of future taxable profits together with
future tax planning strategies.
2. Accounting policies (Cont.)
C. Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognized when control of the goods
or services are transferred to the customer at an amount that reflects the
consideration to which the Company expects to be entitled in exchange for
those goods or services
1. Revenues from Construction Contracts are recognized based on the
percentage of completion to date. The percentage of completion is determined
using the inputs method
The Company elected not to adjust the transaction price for the effects of
financing components in contracts where the period between when the Company
transfers a promised good or a service to the customer and when the customer
pays for it is one year or less.
2. Revenues from the sale of goods are recognized at the point in time
when control of the asset is transferred to the customer, generally upon
delivery of the equipment.
At the end of each reporting period, the Company updates its estimates of
variable consideration.
D. Functional currency and Foreign currency transactions
The reporting currency of the Group is U.S. Dollars ("dollar"; "USD"), which
is the currency of the primary economic environment in which the Company and
the majority of the Group's subsidiaries operate. For each entity, the Group
determines the functional currency and items included in the financial
statements of each entity are measured using that functional currency.
E. Property, plant and equipment
Items of property, plant and equipment are initially and subsequently
recognized at cost including directly attributable costs. Depreciation is
calculated on a straight line basis, over the useful lives of the assets at
annual rates as follows:
Rate of depreciation Mainly %
Buildings 3 - 4 % 3.13
Machinery and equipment 6 - 20 % 10
Office furniture and equipment 6 - 15 % 6
Computer equipment 10 - 33 % 33
Vehicles 15 % 15
F. Provision for warranty
The Group generally offers up to three year warranties on its products. Based
on past experience, the Group does not record any provision for warranty of
its products and services due to immateriality.
G. Employee benefits
1. Short-term employee benefits: Short-term employee benefits are
benefits that are expected to be settled wholly before twelve months after the
end of the annual reporting period in which the employees render the related
services. These benefits include salaries, paid annual leave, paid sick leave,
recreation and social security contributions and are recognized as expenses as
the services are rendered.
2. Accounting policies (Cont.)
2. Post-employment benefits: The plans are normally financed by
contributions to insurance companies and classified as defined contribution
plans or as defined benefit plans.
The Group has defined contribution plans pursuant to Section 14 of the
Severance Pay Law since 2004 under which the Group pays fixed contributions to
a specific fund and will have no legal or constructive obligation to pay
further contributions if the fund does not hold sufficient amounts to pay all
employee benefits relating to employee service in the current and prior
periods. Contributions to the defined contribution plan in respect of
severance or retirement pay are recognized as an expense simultaneously with
receiving the employee's services and no additional provision is required in
the financial statements except for the unpaid contribution. The Group also
operates a defined benefit plan in respect of severance pay pursuant to the
Severance Pay Law. According to the Law, employees are entitled to severance
pay upon dismissal, retirement and several other events prescribed by that
Law. The liability for post employment benefits is measured using the
projected unit credit method. The actuarial assumptions include rates of
employee turnover and future salary increases based on the estimated timing of
payment. The amounts are presented based on discounted expected future cash
flows using a discount rate determined by reference to yields on high quality
corporate bonds with a term that matches the estimated term of the benefit
plan.
In respect of its severance pay obligation to certain of its employees, the
Company makes deposits into pension funds and insurance companies ("Plan
assets"). Plan assets comprise assets held by a Long-term employee benefits
fund or qualifying insurance policies. Plan assets are not available to the
Group's own creditors and cannot be returned directly to the Group. The
liability for employee benefits presented in the statement of financial
position presents the present value of the defined benefit obligation less the
fair value of the plan assets.
H. Segment reporting
Segment revenue and segment costs include items that are attributable to the
relevant segments and items that can be allocated to segments. Items that
cannot be allocated to segments include the Group's financial income and
expenses and income tax.
I. Accounting standards issued but not yet effective
A new accounting standard is effective for annual reporting periods beginning
after 1 January 2024 and earlier application is permitted. However, the Group
has not early adopted the following new or amended accounting standards in
preparing these consolidated financial statements.
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 will replace IAS 1 Presentation of Financial Statements and applies
for annual reporting periods beginning on or after 1 January 2027. The new
standard introduces the following key new requirements.
• Entities are required to classify all income and expenses into five
categories in the statement of profit or loss, namely the operating,
investing, financing, discontinued operations and income tax categories.
Entities are also required to present a newly-defined operating profit
subtotal. Entities' net profit will not change.
• Management-defined performance measures (MPMs) are disclosed in a single
note in the financial statements.
• Enhanced guidance is provided on how to group information in the
financial statements.
2. Accounting policies (Cont.)
In addition, all entities are required to use the operating profit subtotal as
the starting point for the statement of cash flows when presenting operating
cash flows under the indirect method.
The Group is still in the process of assessing the impact of the new standard,
particularly with respect to the structure of the Group's statement of profit
or loss, the statement of cash flows and the additional disclosures required
for MPMs. The Group is also assessing the impact on how information is grouped
in the financial statements, including for items currently labelled as
'other'.
3. Acquisition of subsidiary:
On 3 January 2022 the Company, via its wholly-owned subsidiary, MTI Summit
Electronics Ltd. ("MTI Summit"), entered into a share purchase agreement,
which included both a purchase of existing shares in and the making of a new
equity investment into P.S.K. WIND Technologies Ltd. ("PSK"), after which MTI
Summit owns 51% of PSK (the "Acquisition"). In addition to the Acquisition,
MTI Summit has an option to purchase and the Shareholders of PSK ("Original
Owners") have an option to sell to MTI Summit the remaining 49% of PSK (the
"Option") starting from 2027.
The cost of the Acquisition was allocated to tangible assets, intangible
assets and liabilities which were acquired based on their fair value at the
time of the acquisition. The intangible assets recognized include order
backlog and customer relations in the total amount of US$ 111 thousands and
US$ 1,599 thousands respectively, deferred taxes
in the total amount of US$ 394 thousands and goodwill in the total amount US$
1,400 thousands. The intangible assets associated with customer relations are
amortized over a useful life of up to 15 years.
The goodwill arising on Acquisition is attributed to the expected benefits
from the synergies of the combination of the activities of the Company and
PSK. The goodwill recognized is not expected to be deductible for income tax
purposes. All transaction costs have been recorded in General and
administrative expenses.
Contingent consideration:
As part of the purchase agreement with the owners of PSK, it was agreed that
the sellers, who retain a 49% holding in PSK would be entitled to further
consideration to be paid pursuant to an earn out mechanism dependent on PSK's
actual revenues in 2022 and 2024 versus certain agreed targets in each of
those years and is capped at a maximum of NIS 8,000,000 (approximately
US$2.56m), to be paid in cash.
Put Option liability:
MTI Summit has an option to purchase and the vendors of PSK have an option to
sell to MTI Summit the remaining 49% of PSK (the "Option") starting from 2027.
The value of PSK under the Option is to be calculated on the basis of eight
times the average EBITDA level of PSK in 2025 and 2026, with MTI being
required to pay 49% of this value upon exercise. If the Option is to be
exercised at any time after the preparation of PSK's financial results for the
first quarter of 2027, the calculation will be based on PSK's average EBITDA
for the last eight quarters. The Option will remain in place until
exercised.
3. Acquisition of subsidiary (Cont.):
The significant non-observable data used in measuring the fair value of the
liability in respect of the contingent consideration and the Put Option
liability are as follows:
Discount rate: 15.5%
A significant increase (or decrease) in the estimated amount of PSK's pre-tax
income will result in a significant increase (decrease) in the fair value of
the liability in respect of the contingent consideration whereas a significant
increase (decrease) in the discount rate and default risk rate will result in
a decrease (an increase) in the fair value of the liability.
At the end of 2023, MTI Summit and the Original Owners of 49% of PSK signed an
amendment to PSK's share purchase agreement according to which:
a. On 1 January 2024, MTI Summit granted a new loan to PSK (the "New
Loan") totalling NIS 2,260,000 (approximately US$625,000), replacing the
Original Loan. This New Loan bears interest equal to the interest that PSK
pays for short term credit in the bank minus 2% (currently the interest of the
New Loan is 6.9% per annum). The obligations on PSK to secure the repayment of
the New Loan remain unchanged compared to the Original Loan.
b. The Company will provide PSK with guaranties in order for PSK to
receive bank guaranties in favour of customers, related to projects performed
by PSK, with the costs of such guarantees to be borne by PSK.
c. The value of PSK under the Option is to be calculated on the basis of
six (rather than eight in the original agreement) times the average EBITDA
level of PSK in 2025 and 2026. All other terms of the option shall remain
unchanged.
The Company revalued the Contingent consideration and the Put option
liabilities of PSK, as stated in the balance sheet on 31 December 2023,
resulting in financial income of USD 315 thousand. On 31 December 2024 the
contingent liability expired (but not the put option) without any payments
from the Group, as the revenue level in 2024 was below the lower limit,
resulting in financial income of USD 280 thousand.
4. Revenues
For the year ended December 31,
2024 2023
Revenues arises from: $'000 $'000
Sale of goods * 32,827 32,525
Rendering of services ** 8,075 7,178
Projects ** 4,671 5,931
45,573 45,634
(*) at a point in time
(**) over time
5. Profit from operations
For the year ended December 31,
2024 2023
This has been arrived at after charging: $'000 $'000
Material and subcontractors 21,807 21,993
Wages and salaries 13,709 13,498
Plant, Machinery and Usage 1,827 1,557
Depreciation and amortization 1,476 1,511
Travel and Exhibition 342 336
Advertising and Commissions 656 710
Consultants 637 505
Others 607 874
41,060 40,984
6. Operating segments
The Company and its subsidiaries are engaged in the following segments:
- Development, design, manufacture and marketing of antennas for the
military and civilian sectors.
- A leading provider of remote control solutions for water and
irrigation applications based on Motorola's IRRInet state of the art control,
monitoring and communication technologies.
- Providing consulting, representation and marketing services to
foreign companies in the field of RF and Microwave, including engineering
services in the field of aerostat systems and system engineering services
together with the development, manufacture and integration of communication
systems and advanced monitoring and control systems for the Government and
defence industry market.
1. Segment information
Year ended December 31, 2024
Antennas Water Solutions Distribution & Consultation Eliminations Total
U.S. $ in thousands
Revenues
External 14,136 16,888 14,549 - 45,573
Inter-segment - - 296 (296) -
Total 14,136 16,888 14,845 (296) 45,573
Segment profit 1,311 2,307 471 423 4,512
Finance income, net 300
Profit before tax 4,812
Tax expenses 619
Profit 4,193
6. Operating Segments (cont.)
December 31, 2024
Antennas Water Solutions Distribution & Consultation Eliminations Total
U.S. $ in thousands
Segment assets 17,404 13,406 11,672 - 42,482
Unallocated assets 2,295
Segment liabilities 5,363 4,618 4,394 - 14,375
Unallocated liabilities 894
Year ended December 31, 2023
Antennas Water Solutions Distribution & Consultation Eliminations Total
U.S. $ in thousands
Revenues
External 12,237 17,164 16,233 - 45,634
Inter-segment - - 344 (344) -
Total 12,237 17,164 16,577 (344) 45,634
Segment profit 841 1,986 1,552 271 4,650
Finance income, net 185
Profit before tax 4,835
Tax expenses 759
Profit 4,076
December 31, 2023
Antennas Water Solutions Distribution & Consultation Elimination Total
U.S. $ in thousands
Segment assets 17,124 12,468 12,711 - 42,303
Unallocated assets 2,400
Segment liabilities 4,952 4,326 5,293 - 14,571
Unallocated liabilities 880
6. Operating Segments (cont.)
2. Entity wide disclosures of External revenue by location of
customers.
For the year ended December 31,
2024 2023
$'000 $'000
Israel 29,742 28,750
America 4,797 4,824
Europe Middle East & Africa 5,270 7,503
Asia Pacific 5,764 4,557
45,573 45,634
3. Additional information about revenues:
There is one single customer from which revenues amount to 11.2% in 2024
(13.6% in 2023) of total revenues reported in the financial statements. This
is a customer for the antenna and distribution & consultation segments and
the credit terms with it are usually end of month + 90 days.
7. Finance expense and income
For the year ended December 31,
2024 2023
$'000 $'000
Finance expense
Net Foreign exchange loss - -
Leases 25 32
Interest and bank fees 257 315
282 342
Finance income
Net Foreign exchange profit 111 35
Change in contingent consideration and Put Option liability 280 315
Interest from bank deposits 191 177
582 527
(300) (185)
8. Tax expenses
A. Tax Laws in Israel
1. Amendments to the Law for the Encouragement of Capital Investments, 1959
(the "Encouragement Law"):
In December 2010, the "Knesset" (Israeli Parliament) passed the Law for
Economic Policy for 2011 and 2012 (Amended Legislation), 2011 ("the
Amendment"), which prescribes, among others, amendments to the Law. The
Amendment became effective as of January 1, 2011. According to the Amendment,
the benefit provisions in the Law were modified and a flat tax rate applies to
the Company's entire preferred income. Commencing from the 2011 tax year, the
Group will be able to opt to apply (the waiver is non-recourse) the Amendment
and from the elected tax year and onwards, it will be subject to the amended
tax rates that are: 2014 and thereafter will be 16% (in development area A -
9%).
8. Tax expenses (cont.)
The Group applied the Amendment effectively from the 2011 tax year.
On 15 November 2021 an amendment to the Encouragement Law was approved (the
"2021 Amendment"). According to the 2021 Amendment companies that had retained
earnings from exempt income earned before 31 December 2020 can distribute
those earnings with a lower tax rate of 10% to the Company and withholding tax
of 15% to the shareholders.
2. Tax rates:
On December 29, 2016, the Law for Economic Efficiency (Legislative Amendments
for Achieving the Budgetary Goals for 2017-2018) was published in Reshumot
(the Israeli government official gazette), which enacts, among other things,
the following amendments:
- Decreasing the corporate tax rate to 24% in 2017 and to 23% in
2018 and thereafter (instead of 25%).
- Commencing tax year 2017 and thereafter the tax rate on the income of
preferred enterprises of a qualifying Company in Development Zone A as stated
in the Encouragement of Capital Investment
Law, shall decrease to 7.5% (instead of 9%) and for companies located in zones
other than Zone A the rate shall remain 16%.
- In addition, the tax rate on dividends distributed on January 1,
2014 and thereafter originating from preferred income under the Encouragement
Law will be raised to 20% (instead of 15%).
Therefore the Company's applicable corporate tax rate for 2014 and thereafter
is 16%.
B. The principal tax rates applicable to the subsidiaries whose place of
incorporation is outside Israel are:
A company incorporated in India - The statutory tax rate is 28% and the
Company was in an exempt zone until end of March 2013 and further in a 50% tax
exempt zone until end of March 2018. Nevertheless from the Tax Year 2011-12,
in the absence of taxable income or tax due on taxable income (calculated as
per normal rates) being less than 18.5% of the Accounting Book Profits during
a particular year, the Indian regulation states that the company has to pay a
Minimum Alternate tax at a rate of 18.5% of the Accounting Book Profits for
that year. Such excess Minimum Alternate Tax paid on book profits over
the Tax due on
Actual Taxable Income (calculated as per normal rates) of each year
is capable of set off against the taxable profits of future years. One of the
subsidiaries in India still enjoys a 50% tax exemption until end of March
2028.
A company incorporated in Switzerland - The weighted tax rate applicable to a
company operating in Switzerland is about 25% (composed of Federal, Cantonal
and Municipal tax). Provided that the company meets certain conditions, the
weighted tax rate applicable to its income in Switzerland will not exceed 10%.
A company incorporated in South Africa - the statutory tax rate is 27%
A company incorporated in Australia - the statutory tax rate is 30%
A company incorporated in United States of America - the statutory tax rate is
21%.
A company incorporated in Canada - the statutory tax rate is 25%.
8. Tax expenses (cont.)
C. Income tax assessments
The Company has tax assessments considered as final up to and including the
year 2018.
For the year ended December 31,
2024 2024 2023 2023
$'000 $'000 $'000 $'000
Current tax expense
Income tax on profits for the year 849 768
Taxes in respect of previous years (11) (204)
838 564
Deferred tax expenses (income) (see note 13)
Origination and reversal of temporary differences (219) 195
(219) 195
Total tax expenses 619 759
The adjustments for the difference between the actual tax charge for the year
and the standard rate of corporation tax in Israel applied to profits for the
year are as follows:
For the year ended December 31,
2024 2023
$'000 $'000
Profit before income tax 4,813 4,835
Tax using the Company's domestic tax rate of 16% 770 773
Non-deductible expenses 77 53
Taxes resulting from different tax rates applicable to foreign and other (129) 55
subsidiaries
Utilization of prior year's tax losses for which deferred taxes were not (94) (119)
provided
Adjustments for current income tax of prior years (11) (204)
Other 6 201
Total income tax expense 619 759
9. Earnings per share
Net earnings per share attributable to equity owners of the parent
For the year ended
December 31,
2024 2023
$'000 $'000
Net earnings used in basic and diluted EPS 4,364 4,045
Weighted average number of shares used in basic EPS 87,371,990 88,283,490
Weighted average number of shares used in diluted EPS 87,460,876 88,283,490
Basic and diluted net EPS (dollars) 0.0499 0.0458
10. Dividends
For the year ended
December 31,
2024 2023
$'000 $'000
Dividend paid 2,745 2,656
11. Property, plant and equipment
Building Machinery & Office Computer equipment Vehicles Right of use asset Total
equipment
furniture & equipment
$'000
Cost:
Balance as of January 1, 2024 5,320 6,855 768 2,678 1,353 2,020 18,994
Acquisitions 115 371 18 80 307 548 1,439
Disposals - - - (1) (181) - (182)
Exchange differences (2) (8) (5) (2) (25) - (42)
Balance as of December 31, 2024 5,433 7,218 781 2,755 1,454 2,568 20,209
Accumulated Depreciation:
Balance as of January 1, 2024 2,764 5,790 678 2,517 721 1,126 13,596
Additions 116 202 26 144 204 519 ,2111
Disposals - - - (1) (151) - (152)
Exchange differences - (8) (4) (1) (17) - (30)
Balance as of December 31, 2024 2,880 5,984 700 2,659 757 1,645 14,625
Net book value as of December 31, 2024 2,553 1,234 81 96 696 923 5,584
Lease liabilities Year ended December 31
2024 2023
$'000 $'000
Interest expense 25 32
Total cash outflow for leases 389 517
Additions to right-of-use assets 548 643
The Company has two types of lease agreements mainly for the (i) premises on
lease at the Cochin Special Economic Zone (CSEZ) in India for 15 years and
(ii) leases of cars in Israel for the use of its employees for up to three
years.
December 31, 2024 Less than one year 1 to 2 years 2 to 3 3 to 4 years > 4 Total
years years
$'000
Lease liabilities 294 188 94 15 303 894
December 31, 2023 Less than one year 1 to 2 years 2 to 3 3 to 4 years > 4 Total
years years
$'000
Lease liabilities 366 132 57 11 314 880
11. Property, plant and equipment (cont.)
Building Machinery & Office Computer equipment Vehicles Right of use asset Total
equipment
furniture & equipment
$'000
Cost:
Balance as of January 1, 2023 5,316 6,763 752 2,547 1,324 1,936 18,638
Acquisitions 10 94 18 135 169 643 1,069
Disposals - - - - (125) (559) (684)
Exchange differences (6) (2) (2) (4) (15) - (29)
Balance as of December 31, 2023 5,320 6,855 768 2,678 1,353 2,020 18,994
Accumulated Depreciation:
Balance as of January 1, 2023 2,644 5,645 652 2,375 606 1,143 13,065
Additions 120 147 26 144 193 530 1,160
Disposals - - - - (76) (547) (623)
Exchange differences - (2) - (2) (2) - (6)
Balance as of December 31, 2023 2,764 5,790 678 2,517 721 1,126 13,596
Net book value as of December 31, 2023 2,556 1,065 90 161 632 894 5,398
12. Intangible assets
Goodwill from business combination Customer relations * Total
$'000
Cost:
Balance as of December 31, 2024 3,488 2,425 5,913
Accumulated Amortization and impairments:
Balance as of January 1, 2024 1,420 986 2,406
Amortization and impairments charge - 159 159
Balance as of December 31, 2024 1,420 1,145 2,565
Net book value as of December 31, 2024 ,0682 1,280 3,348
Cost:
Balance as of December 31, 2023 3,488 2,425 5,913
Accumulated Amortization and impairments:
Balance as of January 1, 2023 1,227 828 2,055
Amortization and impairments charge 193 158 351
Balance as of December 31, 2023 1,420 986 2,406
Net book value as of December 31, 2023 2,068 1,439 3,507
(*) Customer relations is amortized over an economic useful life of between
6.5 to 15 years.
12. Intangible assets (cont.)
In December 2023, the Group performed its annual impairment test of the cash
generating unit (PSK) based on a 'value in use' calculation, using cash flow
projections from financial budgets approved by senior management covering a
five-year period. The pre-tax discount rate applied to cash flow projections
was 23%. The projected cash flows for the period exceeding five years were
estimated using a fixed growth rate of 2%. It was concluded that the fair
value less costs of disposal did not exceed the value in use. As a result of
this analysis, management has recognized an impairment charge of USD 193
thousand in the current year against goodwill. This charge is included in
general administrative expenses.
In December 2024, the Group performed its annual impairment test of the cash
generating units based on a 'value in use' calculation, using cash flow
projections from financial budgets approved by senior management covering a
five-year period. The pre-tax discount rate applied to cash flow projections
was 23%. The projected cash flows for the period exceeding five years were
estimated using a fixed growth rate of 2%. It was concluded that the fair
value less costs of disposal exceed the value in use. Therefore, the Company
didn't recognize any impairment against goodwill.
13. Deferred tax assets
Deferred tax assets are calculated on temporary differences under the
liability method using the tax rates that are expected to apply to the period
when the asset is realised.
The movement in the deferred tax assets is as shown below:
2024 2023
$'000 $'000
At January 1 968 1,163
Charged to profit or loss 219 (195)
At December 31 1,187 968
Deferred tax assets have been recognized in respect of all differences giving
rise to deferred tax assets because it is probable that these assets will be
recovered.
Composition:
31.12.2024 31.12.2023
$'000 $'000
Accrued severance pay 100 103
Other provisions and employee-related obligations 120 113
Research and development expenses deductible over 3 years 148 147
Carry forward tax losses 1,066 922
Customer relations - arising from acquisition of P.S.K (247) (317)
1,187 968
Carry forward capital losses of the Group total approximately $1,031 and $984
thousand as of 31 December 2024 and 2023 respectively were not recognized for
deferred tax assets in the financial statements because their utilization in
the foreseeable future is not probable.
14. Inventories
31.12.2024 31.12.2023
$'000 $'000
Raw materials and consumables 6,494 5,638
Work-in-progress 17 56
Finished goods and goods for sale 1,657 1,790
8,168 7,484
15. Trade receivables, other receivables and unbilled revenue
31.12.2024 31.12.2023
$'000 $'000
Trade receivables 14,252 12,124
Unbilled revenue - Projects 3,200 4,190
Other receivables 2,474 2,160
19,926 18,474
Trade receivables:
31.12.2024 31.12.2023
$'000 $'000
Trade receivables (*) 14,125 11,858
Notes receivable 202 353
Allowance for expected credit losses (75) (87)
14,252 12,124
(*) Trade receivables are non-interest bearing. They are generally on
60-120 day terms.
As at 31 December 2024 trade receivables of $1,790,000 (2023 - $320,000) were
past due but not impaired.
They relate to the customers with no default history.
Unbilled revenue:
31.12.2024 31.12.2023
$'000 $'000
Actual completion costs 4,517 4,610
Revenue recognised 3,740 1,954
Billed revenue (5,057) (2,374)
Total Unbilled receivables - Projects 3,200 4,190
Other receivables:
31.12.2024 31.12.2023
$'000 $'000
Prepaid expenses 1,646 1,056
Advances to suppliers 457 818
Tax authorities - V.A.T 55 106
Employees 316 180
2,474 2,160
16. Cash and cash equivalents
31.12.2024 31.12.2023
$'000 $'000
In U.S. dollars 3,647 4,236
In other currencies 2,622 4,218
6,269 8,454
17. Loans from banks
31.12.2024 31.12.2023
$'000 $'000
NIS 311 375
South African Rand - 3
Less - current maturities (274) (314)
37 64
All bank loans are for the purchase of cars and are secured by a fixed lien on
the cars, aside from the use of a short term credit line by PSK.
Mottech South Africa had a loan agreement of approximately US$ 30 thousand for
the purchase of cars for which was repaid in Q1 2024. The interest rate was
linked to the South Africa prime lending rate.
During 2022 PSK entered into a loan agreement of approximately US$ 133
thousand for the purchase of cars, which is payable over 36 - 48 months on a
monthly basis. The interest rate is linked to the Prime interest rate.
At December 31 2024 First Second year Third
year year and thereafter
$'000
Long-term loan 274 27 10
18. Employee benefits
A. Composition:
As at December 31
2024 2023
$'000 $'000
Present value of the obligations 1,744 1,757
Fair value of plan assets (974) (1,038)
770 719
B. Movement in plan assets:
For the year ended December 31,
2024 2023
$'000 $'000
Year beginning 1,038 908
Foreign exchange gain (loss) (108) 73
Interest income 32 33
Contributions 13 15
Benefit paid - (9)
Re measurements gain (loss)
Actuarial gain (loss) from financial assumptions - (1)
Return on plan assets (excluding interest) (1) 19
Year end 974 1,038
C. Movement in the liability for benefit obligation:
For the year ended December 31,
2024 2023
$'000 $'000
Year beginning 1,757 1,660
Foreign exchange loss (profit) (183) 48
Interest cost 156 105
Current service cost 31 43
Benefits paid - (48)
Re measurements loss (gain)
Actuarial gain from financial assumptions (1) (12)
Adjustments (experience) (16) (39)
Year end 1,744 1,757
18. Employee benefits (cont.)
Supplementary information
1. The Group's liabilities for severance pay, retirement and pensions
pursuant to Israeli law and employment agreements are recognized in full - in
part by managers' insurance policies, for which the Group makes monthly
payments and accrued amounts in severance pay funds and the rest by the
liabilities which are included in the financial statements.
2. The amounts funded displayed above include amounts deposited in severance
pay funds with the addition of accrued income. According to the Severance Pay
Law, the aforementioned amounts may not be withdrawn or mortgaged as long as
the employer's obligations have not been fulfilled in compliance with Israeli
law.
3. Principal nominal actuarial assumptions:
As at December 31,
2024 2023
Discount rate on plan asset 5.51% 5.20%
Expected increase in pensionable salary 2% 2%
4. Sensitivity test for changes in the expected rate of salary increase or
in the discount rate of the plan assets and liability:
Change in defined benefit obligation
As at December 31,
2024 2023
$'000 $'000
The change as a result of:
Salary increases of 1 % 32 37
Salary decreases of 1 % (26) (34)
The change as a result of:
Increase of 1% in discount rate (37) (32)
Decrease of 1% in discount rate 31 35
Year ended December 31,
2024 2023
$'000 $'000
Expenses in respect of defined contribution plans 543 524
19. Trade and other payables
As at December 31,
2024 2023
$'000 $'000
Trade payables 8,433 7,882
Employees' wages and other related liabilities 1,832 1,816
Advances from trade receivables 650 1,004
Accrued expenses 669 848
Government authorities 170 171
Lease liability 293 366
Others 484 353
12,531 12,440
20. Current maturities and short-term bank credit
As at December 31,
Interest rate 2024 2023
as at December 31, 2024
% $'000 $'000
Current maturities In NIS Prime + 0.9 - 2.2 274 311
Current maturities In SA ZAR - 3
Total Current maturities and short-term bank loans 274 314
Changes in liabilities arising from financing activities
Reconciliation of the changes in liabilities for which cash flows have been,
or will be classified as financing activities in the statement of cash flows
Loans and borrowings Lease liabilities
Total
$'000
At 1 January 2024 378 880 1,258
Changes from financing cash flows:
Payments of lease liabilities - (491) (491)
Receipt loans from banks 14 - 14
Repayment of long-term loans from banks (101) - (101)
Total changes from financing cash flows 291 389 680
New leases - 548 548
Interest expense - 25 25
Interest paid - (25) (25)
Effects of foreign exchange 20 (43) (23)
At 31 December 2024 311 894 1,205
20. Current maturities and short-term bank credit (cont.)
Loans and borrowings Lease liabilities
Total
$'000
At 1 January 2023 141 752 893
Changes from financing cash flows:
Payments of lease liabilities - (485) (485)
Receipt loans from banks 460 - 460
Repayment of long-term loans from banks (247) - (247)
Total changes from financing cash flows 354 267 621
New leases - 643 643
Interest expense - 32 32
Interest paid - (32) (32)
Effects of foreign exchange 24 (30) (6)
At 31 December 2023 378 880 1,258
21. Financial instruments - Risk Management
The Group is exposed through its operations to the following
financial risks:
· Foreign currency risk
· Liquidity risk
· Credit risk
Foreign currency risk
Foreign exchange risk arises when Group companies enter into transactions
denominated in a currency other than their functional currency.
The Group's policy is to allow the Group's entities to pay liabilities
denominated in their functional currency using the cash flows generated from
the operations of each entity. When the Group's entities have liabilities
denominated in a currency other than their functional currency (and the entity
does not have sufficient cash balances in this currency to settle the
liability) the Group, if possible, transfers cash balances from one entity to
another entity in the Group. The Group's currency risks are as follows:
Most of the Company's revenues are in US dollars or linked to that currency,
and the Company's inputs are mainly linked due to the importation of raw
materials paid for in US Dollars, but the wages and salary expenses (which
constitutes a material input in the Company's operations) are in NIS.
Therefore, there is an exposure to changes in the exchange rate of the NIS
against the Dollar.
Management mitigates that risk by holding some cash and cash equivalents and
deposit accounts in NIS. The Company also purchases from time to time some
forward contracts on the NIS/$ exchange rate to hedge part of the salary
costs. Since the purchase of Mottech the Group has an additional currency risk
due to its subsidiaries' activity.
21. Financial instruments - Risk Management (Cont.)
The following is a sensitivity analysis of a change of 5% as of the date of
the financial position in the NIS exchange rates against the functional
currency, while the rest of the variables remain constant, and their effect on
the pre-tax profit or loss on equity:
Profit (loss) from change Book value Profit (loss) from change
December 31, 2024
NIS exchange rate 0.260 0.2742 0.288
Total assets, net ($'000) 241 4,812 (241)
December 31, 2023
NIS exchange rate 0.262 0.276 0.289
Total assets, net ($'000) 217 4,341 (217)
The Company's exposure to changes in foreign currency in all other currencies
is immaterial.
Total Other currencies NIS USD
$'000
As of December 31, 2024
Assets
Current assets:
6,269 1,463 1,159 3,647 Cash and cash equivalents
17,452 574 8,826 8,052 Trade receivables
2,474 97 2,184 193 Other receivables
Liabilities
current liabilities:
274 - 274 - Current maturities and short-term bank credit and loans
8,433 1,106 3,986 3,341 Trade payables
3,805 860 2,839 106 Other accounts payables
non- current liabilities:
- - - - Contingent consideration and Put option liability
37 - 37 - Loans from banks, net of current maturities
13,646 168 5,033 8,445 Total assets, net
21. Financial instruments - Risk Management (Cont.)
Total Other currencies NIS USD
$'000
As at December 31, 2023
Assets
Current assets:
8,454 2,234 1,983 4,237 Cash and cash equivalents
16,314 579 8,513 7,222 Trade receivables
2,160 159 1,850 151 Other receivables
Liabilities
current liabilities:
314 3 311 - Current maturities and short-term bank credit and loans
7,882 894 4,502 2,486 Trade payables
4,192 870 3,128 194 Other accounts payables
non- current liabilities:
1,117 - 1,117 - Contingent consideration and Put option liability
64 - 64 - Loans from banks, net of current maturities
13,359 1,205 3,224 8,930 Total assets, net
Liquidity Risk
Liquidity risk is the risk that arises when the maturity of assets and
liabilities does not match. An unmatched position potentially enhances
profitability but can also increase the risk of insufficient liquidity means
to fulfil its immediate obligations. The Group's objective is to maintain a
balance between continuity of funding and flexibility. The Group has
sufficient availability of cash, including the short-term investment of cash
surpluses, and can raise loans to meet its obligations by cash management,
subject to the Group's policies and guidelines.
The table below summarizes the maturity profile of the Group's financial
liabilities based on contractual undiscounted payments (including interest
payments):
December 31, 2024 Less than one year 1 to 2 years 2 to 3 3 to 4 years > 4 Total
years years
$'000
Put option liability - - 837 - - 837
Loans from banks 274 27 10 - - 311
Trade payables 8,433 - - - - 8,433
Payables 4,098 - - - - 4,098
12,805 27 847 - - 13,679
December 31, 2023 Less than one year 1 to 2 years 2 to 3 3 to 4 years > 4 Total
years years
$'000
Contingent consideration and Put option liability - 280 - - 837 1,117
Loans from banks 314 36 28 - - 378
Trade payables 7,882 - - - - 7,882
Payables 4,558 - - - - 4,558
12,754 316 28 - 837 13,935
21. Financial instruments - Risk Management (Cont.)
Credit risks
Financial instruments which have the potential to expose the Group to credit
risks are mainly deposit accounts, trade receivables and other receivables.
The Group holds cash and cash equivalents in short term deposit accounts in
banking institutions in Israel that are considered financially sound, thereby
substantially reducing the risk to suffer credit loss.
With respect to trade receivables, the Group believes that there is no
material credit risk which is not mitigated in light of Group's policy to
assess the credit risk of customers before entering contracts. Moreover, the
Group evaluates trade receivables on a timely basis and adjusts the allowance
for expected credit losses accordingly. Since January 2019 the Company has had
an agreement with a credit insurance company to further mitigate this risk.
The aging analysis of these trade-receivable balances by business segment is
as follows:
Fair value
A. Fair value of financial assets and liabilities:
Fair value measurements using input type
$'000
Level 1 Level 2 Level 3 Total
As of December 31, 2024
Contingent consideration liability (see note 3) - - - -
As of December 31, 2023
Contingent consideration liability (see note 3) - - 280 280
Reconciliation of fair value measurements that are categorized within Level 3
of the fair value hierarchy:
2024 2023
$'000 $'000
Balance as of January 1 1,117 1,432
Contingent consideration liability (see note 3) - -
Net loss (profit) recognized in Profit or loss (280) (315)
Balance as of December 31 837 1,117
B. Financial instruments not measured at fair value:
The carrying amount of cash and cash equivalents, trade receivables, other
accounts receivable, credit from banks and others, trade payables and other
accounts payable approximate their fair value.
The Group is not exposed to cash flow risk due to interest rates since the
long-term loan bears fixed interest.
The following table demonstrates the carrying amount and fair value of the
groups of financial instruments that carrying amounts does not approximate
fair value:
21. Financial instruments - Risk Management (Cont.)
Carrying amount Fair value
2024 2023 2024 2023
Financial liabilities: $'000
Long-term loan with interest (1) 69 64 69 64
(1) The fair value of the long-term loan received with fixed
interest is based on the present value of cash flows using an interest rate
currently available for a loan with similar terms.
Linkage terms of financial liabilities by groups of financial instruments
December 31, 2024:
NIS Unlinked S.A Rand Total
$'000
Financial liabilities measured at amortized cost 242 - - 242
December 31, 2023:
NIS Unlinked S.A Rand Total
$'000
Financial liabilities measured at amortized cost 311 - 3 314
Capital management
The Group's objective is to maintain, as much as is possible, a stable capital
structure. In the opinion of Group's management its current capital structure
is stable. Consistent with others in the industry, the Group monitors capital,
including others also, on the basis of the gearing ratio.
This ratio is calculated as net debt divided by total capital. Net debt is
calculated as total borrowings (including 'current and non-current borrowings'
as shown in the consolidated statement of financial position) less cash and
cash equivalents. Total capital is calculated as 'equity' as shown in the
consolidated statement of financial position plus net debt.
The gearing ratios at 31 December 2024 and 2023 were as follows:
31.12.2024 31.12.2023
$'000
Loans from banks 37 103
bank credit 274 275
Total liabilities 311 378
31.12.2024 31.12.2023
$'000
Share capital 209 209
Additional paid-in capital 22,022 23,061
Retained earnings 6,861 5,226
Capital reserves (615) (466)
Non-controlling interest 1,051 1,222
Total equity 29,508 29,252
Leverage ratio 1% 1.3%
21. Financial instruments - Risk Management (Cont.)
The net debt ratios stem from the Board of Directors' decision to continue to
invest in the Company's development, but without the use of excessive
leverage. The Group intends to examine the leverage ratio from time to time
and to define it according to its needs. The decrease in the net debt ratio in
2024 is derived mainly from the decrease in short-term credit used by the
Company, although it purchased its own shares which reduced the equity of the
Company. The Group intends to maintain the leverage ratio in future periods as
well. Beyond that stated above, there were no other material changes in the
objectives, policies or processes of managing the Group's capital during the
year, as well as in the Group's definition of capital.
22. Subsidiaries:
A. The principal subsidiaries of the Company, all of which have been
consolidated in these consolidated financial statements, are as follows:
Name Country of incorporation Proportion of ownership interest on 31 December Held by
2024 2023
AdvantCom Sarl Switzerland 100% 100% M.T.I Wireless Edge
Global Wave Technologies PVT Limited India 80% 80% AdvantCom Sarl
Ginat Wave India Private ltd. India 100% 100% M.T.I Wireless Edge
MTI Wireless Communication India Pvt. Ltd. India 100% 100% M.T.I Wireless Edge
Mottech water solutions ltd. Israel 100% 100% M.T.I Wireless Edge
Aqua infrastructure management systems ltd Israel 100% 100% Mottech water solutions
Mottech Water Management (pty) ltd. South Africa 85% 85% Mottech water solutions
Mottech USA Inc. United states 100% 100% Aqua water control solution
Mottech Water Management (Shenzhen) Ltd. China - 100% Mottech water solutions ltd.
Mottech Parkland (pty) Ltd. Australia 50% 50% Mottech water solutions ltd.
Mottech Water Management ltd. Canada 100% 100% Mottech water solutions ltd.
M.T.I Engineering ltd. Israel 100% 100% M.T.I Wireless Edge
Summit electronics ltd. Israel 100% 100% M.T.I Engineering ltd.
M.T.I Summit electronics ltd. Israel 100% 100% M.T.I Wireless Edge
P.S.K Wind Technologies Ltd. * Israel 51% 51% M.T.I Summit electronics ltd.
(*) MTI Summit electronics ltd has an option to purchase and the vendors of
PSK have an option to sell to MTI Summit Electronics ltd the remaining 49% of
PSK .
23. Share capital
A. Authorized
2024 2024 2023 2023
Number NIS Number NIS
Ordinary shares of NIS 0.01 each 100,000,000 1,000,000 100,000,000 1,000,000
Issued and fully paid
2024 2024 2023 2023
Number NIS Number NIS
Ordinary shares of NIS 0.01 each at beginning and at the end of the year 88,538,724 885,388 88,538,724 885,388
B. On 24 January 2019, the Company announced a share repurchase program to
conduct market purchases of ordinary shares of par value 0.01 Israeli Shekels
each ("Ordinary Shares") in the Company up to a maximum value of £150,000
(the "Programme"). Thereafter, the board of directors of the Company and the
board of directors of MTI Engineering decided to continue with the Programme
for several further periods. On 13 April 2022, the Company announced that it
would extend the Programme until 31 March 2023, with the Programme having an
increased maximum value of up to £200,000 and with the Programme being
managed by Shore Capital Stockbrokers Limited pursuant to the terms as
announced. On 10 March 2024 the board of directors of the Company and the
board of directors of MTI Engineering decided to extend the Programme
effective from 12 March 2024 until 31 March 2025 and increase the maximum
value of the Programme up to £700,000, with the intention to hold the
Ordinary Shares purchased for a longer period of time. On 20 August 2024 the
Board of directors of the Company and the board of directors of MTI
Engineering decided to increase the maximum value of the Programme to up to
£1,000,000, repeating the intention to hold the Ordinary Shares purchased for
a longer period of time. As at 31 December 2024, 2,343,000 Ordinary Shares
were held in treasury under the Programme.
24. Share-based payment
On 19 November, 2023 the remuneration committee and the board of directors
approved an option plan in relation to the Company's shares ("Option Plan").
The Option Plan includes the authority to grant 2,000,000 options (2.2% of the
Company's issued share capital on a fully diluted basis) with the following
terms:
1. Each option can be exercised into one ordinary share of the
Company at a price of 40p being 25% above the share price at the date
preceding the announcement of the Option Plan in November 2023.
2. The vesting of the options will be: 50% after two years, 25%
after three years and 25% after four years with expiration of the options
being six years after granting.
3. The economic value of the options based on a Black-Scholes
calculation is US$259,000 for the total 2 million options approved by the
board of directors.
As part of the Option Plan, and after receipt of approval at the Company's
General Meeting, the Company granted 600,000 share options to Mr. Moshe (Moni)
Borovitz, the Chief Executive Officer, and 100,000 share options to Mr. Dov
Feiner, the General Manager of the Company's Antenna Division. The expense for
share-based payments (such as stock options) typically appears on the income
statement as part of the Company's operating expenses.
Unexercised options expire six years after the date of the grant after which
they will be void. Options are forfeited when the employee leaves the Company.
There is no cash settlement of the options. The weighted average fair value of
the options as at the grant date is 11 pence (approximately 14 cents) per
option, and was estimated using a Black and Scholes option pricing model based
on the following significant data and assumptions:
Share price - 32.875 pence (representing approximately 40 cents)
Exercise price - 40 pence (representing approximately 49 cents)
Expected volatility - 42.23%
Risk-free interest rate - 4.36%
And expected average life of options 4.375 years
The volatility measured the standard deviation of expected share price returns
is based on the historical volatility of the Company's share price. The
options were granted as part of a plan that was adopted in accordance with the
provision of section 102 of the Israeli Income Tax Ordinance.
The expense recognized in the financial statements for employee services
received for the year ended December 31, 2024 was US $106,000.
24. Share-based payment (Cont.)
The following table lists the number of share options, the weighted average
exercise prices of share options and modification in employee option plans
during the current year:
2024 2024
weighted average exercise price Number
$
Outstanding at beginning of year - -
Exercised during the year - -
Granted during the year 0.40 2,000,000
Forfeited during the year - -
Outstanding at the end of the year 0.40 2,000,000
Exercisable at the end of the year - -
The weighted average remaining contractual life for the share options
outstanding as of December 31, 2024 was 4 years.
25. Commitments and guarantees
A. Royalty commitments
(i) The Group is committed to pay royalties to the Government of Israel on
proceeds from the sales of products that have resulted from research and
development activity funded by the Government of Israel by way of grants.
Under the terms of the Group's funding from the Government of Israel,
royalties of 2%-3.5% are payable on sales of products developed from a project
so funded, up to 100% of the amount of the grant received, including amounts
received since July 1, 2000. In 2024 the Group did not receive any development
grants while in 2023 it received $90,000. The maximum royalty amount payable
by the Group as at December 31, 2024, is US$ 830,000.
No provision is recognized as the Group does not expect to sell relevant
products in the foreseeable future and in relation to new products a provision
will be created once development is in more advanced stages.
During 2024 and 2023 the Group did not pay any royalties.
(ii) The Group is committed to pay royalties to the Government of Israel on
proceeds from growth in sales of Mottech's products in China of which the
Government of Israel participates by way of grants. Under the terms of the
Group's funding from the Government of Israel, royalties of 3% from the
increase of sales in China (base year was 2017) shall be paid up to 100% of
the amount of the grant received and shall begin after completion of the
grant receipt, which occurred in 2020. The maximum royalty amounts payable by
the Group as at December 31, 2024 and 2023 are US$ 217,000.
B. Guarantees
The Group has provided guarantees in favour of customers and government
institutes in the amount of US$ 582,000 and US$ 118,000 respectively. The
guarantees are mainly to guarantee advances received from customers and the
performance of contracts signed.
26. Transactions with related parties:
A. Service Agreement with controlling shareholder:
On 9 March 2022, an amendment to the agreement with Mokirey Aya Management
Ltd. (hereinafter: the "Management Company") was renewed to include
remuneration (per month) of:
1. 56,000 NIS to Mr. Zvi Borovitz for his service as the chairman of the
board of the Company for at least 50% of a standard working week; and
2. 79,000 NIS to Mr. Moni Borovitz for his service as CEO of the Company
for at least 90% of a standard working week.
All amounts are prior to VAT which will be added to the invoices and are
linked to the increase in the consumer price index. In addition to the above,
and in accordance with the remuneration policy adopted by the Company, as
required under rule 20 of the Israeli Companies Law, a bonus scheme was
granted to each of the managers. The bonus scheme states that Zvi Borovitz and
Moni Borovitz will each be entitled to a bonus amounting to 2.5% of the
Company's net profit exceeding US$800,000 per year, prior to any bonuses
granted by the Company. In the case of a loss in a year, the bonus for the
next year will be for a net profit exceeding US$800,000 above the loss made in
the
previous year. In addition, Mr. Moni Borovitz shall be entitled to a bonus
equal to three months' management fee, based on the meeting of targets
specified by the remuneration committee at the beginning of each year or per
the remuneration committee's decision to give such for special performance,
plus one month's management fee if the consolidated revenue of the Company
increases by more than 5% from the previous year. A ceiling to the bonuses was
set at eight months management fees for Mr. Moni Borovitz and US$100,000 for
Mr. Zvi Borovitz. The agreement also states that the Company shall reimburse
the Management Company for any expense made in performance of the manager's
duty. The Company shall also provide each of the managers with a car and
phones and will be responsible for all of the related expenses, including all
relevant taxes.
For participation of Mr. Moni Borovitz in the employee share option plan
please see note 23 D above.
B. Transaction with the Parent Group:
The following transactions occurred with the Controlling shareholder and other
related parties:
2024 2023
$'000 $'000
Management Fee 866 793
Compensation of key management personnel of the Group:
2024 2023
$'000 $'000
Short-term employee benefits * 1,365 1,274
Share based payment 40 -
26. Transactions with related parties (cont.)
* Including Management fees for the CEO, Directors, Executive Management and
other related parties including the Controlling shareholder. Please see note
23 D regarding share-based payments to the controlling shareholders which are
not included under short term benefits.
Balances with related parties:
2024 2023
$'000 $'000
Other accounts payables 350 353
27. Significant Events:
A. On January 5, 2024, following approval at an extraordinary shareholders'
meeting, the Company granted 600,000 share options to Mr. Moshe (Moni)
Borovitz, the Chief Executive Officer, and 100,000 share options to Mr. Dov
Feiner, the General Manager of the Company's Antenna Division. The expense for
share-based payments (such as stock options) typically appears on the income
statement as part of the Company's operating expenses.
B. On 20 March 2024 at the Company's extraordinary meeting, Mrs. Hani
Lerman was elected as an external non-executive director.
C. On 7 October 2023 Israel was attacked by the Hamas terror
organization leading to war in the Gaza region and Israel followed by
Hezbollah attacking Israel which led to war in the area. The war has led to a
slowdown in the Israeli economy and if this war continues for a prolonged
period, then it may begin to impact the Company. The wide usage of military
reserve personnel, adverse foreign currency exchange rates and restrictions on
access to certain areas in Israel are risks which may affect the Company if
there is a prolonged period of war. As of the date of this report, and to the
best of the Company's knowledge, the war has not had a significant effect on
the Company. The Company continues to review the effects of the war on its
trading as it believes that if the war continues for a long period of time,
then the overall Israeli economy will be effected, and factors including the
lack of available manpower, interest rates and foreign currency exchange rates
may have an impact on its trading. On 27 November 2024 a ceasefire agreement
between Israel and Lebanon was signed followed by a temporary ceasefire
agreement between Israel and Gaza on 19 January 2025. As at the date of
publication of this report a final ceasefire agreement has not been reached.
28. Subsequent events
A. The Board of directors has decided to declare a cash dividend of
3.3 US cents per share being approximately $2,922,000. This dividend will be
paid on 11 April 2025 to shareholders on the register at the close of trading
on 28 March 2025 (ex-dividend on 27 March 2025). The currency translation into
British Pounds will be made on 2 April 2025 and there will not be a scrip
dividend alternative.
B. The financial statements were authorized for issue by the board
as a whole following their approval on 16 March 2025.
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