LONDON (Alliance News) - Amiad Water Systems Ltd on Thursday said it swung to pretax profit in 2015, despite revenue coming in flat, after having implemented a restructuring and cost-cutting programme over the year.
The provider of water treatment and filtration products and services posted pretax profit of USD6.7 million for the year ended December 31, compared with a loss of USD400,000 in 2014. Amiad's gross margin improved to 40.5% from 38.9%, mainly due to the benefits of the cost cutting and restructuring programme, efficiency gains in the manufacturing process and product mix.
Selling and marketing expenses fell to USD25.5 million from USD28.2 million, whilst finance costs were down at USD2.9 million from USD3.4 million. Amiad said in total it has reduced its cost base by around USD4.0 million on an annualised basis.
Amiad Water said its revenue for the twelve months was largely flat at USD118.8 million, from USD118.5 million in 2014, but said revenue recognition continued to be impacted by adverse changes in exchange rates, primarily the US dollar against the New Israeli Shekel. Amiad is headquartered in Israel.
As such, Amiad hiked its full-year dividend to USD0.067 per share, from USD0.022 per share last year when it paid only an interim dividend.
"In 2016, we continue to demonstrate progress and maintain tight cost control. However, we are cautious about the potentially negative impact of global macro-economic conditions, currency headwinds and uncertainty due to the US elections. We expect the Irrigation segment to continue to be the main contributor to revenue," said Chief Executive Arik Dayan.
"The Municipal segment is anticipated to return to growth, and there are increased orders from India and China in the Industrial segment compared with last year. In the Oil & Gas segment, 2015 was an exceptionally good year, however, in 2016 we expect a reduction in projects due to the effect on the industry from lowered oil prices," Dayan added.
Shares in Amiad were down 0.9% at 149.10 pence on Thursday.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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