MTI Wireless hails higher defence spending though profit falls

(Alliance News) - MTI Wireless Edge Ltd on Tuesday posted higher revenue in the first half, offset by an increase in spending which undermined the defence-focused firm's profit.

The Rosh Haayin, Israel-based producer of military and commercial antennas said sales grew 8.1% to USD24.1 million in the six months that ended June 30 from USD22.3 million a year ago.

The Antenna division's revenue climbed 23% to USD8.3 million from USD6.7 million.

However, revenue from Distribution & Consultation Services decreased to USD7.9 million from USD8.1 million on-year, while the Adjustment & Elimination unit widened its loss to USD314,000 from USD261,000.

Cost of sales ticked up to USD16.3 million from USD15.4 million, leaving pretax profit 1.5% lower at USD2.27 million from USD2.30 million.

Basic earnings per share remained 17% ahead of the previous year at 2.50 US cents from 2.14 cents.

According to MTI, demand for antennas is strong in both the 5G data market and defence sector. Around 40% of the data market is based in India, "though demand from this region remains challenging to predict," MTI noted.

"Global defence spending is increasing, particularly on next-generation military hardware, where antennas play a crucial role, a trend which is benefiting the division significantly," the antenna maker added.

Heading into the second half, MTI described its order backlog as "encouraging", and third-quarter trading as "promising".

Back in July, the Israeli firm reported new contracts worth approximately USD1.6 million with three existing customers in the defence sector.

They include one domestic and two international companies, which MTI did not name.

Back in May, subsidiary MTI Summit Electronics Ltd increased its stake in PSK Wind Technologies Group Ltd to 60% from 51%.

PSK supplies the Israeli military with communications systems and was acquired by MTI in early 2022. MTI predicted a "successful" year ahead amid Israel's war on Gaza.

MTI shares were down 2.3% at 47.38 pence on Tuesday morning in London.

By Holly Munks, Alliance News reporter

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