LONDON (Alliance News) - Telit Communications PLC on Tuesday said its loss widened sharply in the first half of 2018 as it made progress on a turnaround plan.
The wireless technology company said pretax loss widened in the six months to the end of June to USD12.8 million from USD6.7 million reported for the same period a year earlier, despite revenue rising 14% to USD201.7 million from USD177.6 million.
Telit said research & development expenses increased to USD30.9 million from USD25.5 million. The company also recorded USD621,000 costs related to restructuring.
The company said it progressed well on its turnaround plan during the period, focusing on the industrial IoT products, services and solutions. This included the sale of the automotive division for USD105 million, which Telit expects to close towards the end of the year.
It also completed an integration of the products and services teams under a single structure, which the company believes will enable Telit to better define and develop the products required by the market.
The restructuring plan aims to rationalise the operating cost structure and improve future profitability. Telit targets to cut USD10 million in cash operating expenses in 2018.
On a regional basis, Europe, the Middle East & Africa unit was the best performer in the first-half with revenue up 15% year-on-year at USD78.6 million. The result was mainly driven from the strong performance of the company's Automative business, it said.
Asia-Pacific and Americas also performed well with revenues up 11% to GBP36.2 million and 13% to GBP86.9 million, respectively.
The company said Asia-Pacific result was slightly below expectations as Telit still suffered a delay in a big project in this region that negatively impacted the overall performance.
"During H1 2018 we made good progress in implementing our turnaround plan," said Chief Executive Yosi Fait. "We have seen double digit revenue growth, improved gross margins from H2 2017 and our cost optimization plan is well underway."
Fait continued: "We expect to maintain double-digit revenue growth during the rest of 2018, which coupled with good progress with the other objectives, leads us to expect to deliver positive results including 'profit in cash' for the full year."
Shares in Telit were trading 1.4% higher on Tuesday at 164.60 pence each.
