(Alliance News) - Telit Communications PLC on Tuesday said it is well positioned over the medium and long-term, thanks to increasing demand in the 'Internet of Things' market and despite taking a knock in the first half of 2020.
The machine-to-machine communications company saw pretax profit narrow dramatically in the first half to June 30 to USD9.7 million from USD58.1 million a year prior.
Revenue for the half was down to USD166.9 million from USD190.7 million year on year.
Internet of Things connectivity and platform revenue grew however, by 12% to USD21.0 million from USD18.7 million a year prior.
"Customer demand softened as the reporting period progressed after early indications that the group's sales and supply chain would be relatively unaffected. Whilst revenues are below those of the previous year, they have remained resilient," the company said.
Telit Communications took "swift action" at the beginning of the Covid-19 outbreak to protect against the slowdown in customer demand and the introduction of lockdown measures.
These actions saw a cost-reduction plan which included a temporary salary reduction, primarily for management, and a reduction in all areas of discretionary expenditure, including marketing and travel costs.
Telit Communications did not propose an interim dividend.
Going forward, the company will focus solely on industrial Internet of Things products and services, following a strong first-half performance in that area.
Chief Executive Paolo Dal Pino said: "The Covid-19 pandemic is accelerating the adoption of IoT solutions as a 'mission critical' service, mainly due to the increased need to manage assets remotely, which will create medium and long-term benefits for Telit."
OneEdge, Telit Communication's integrated hardware and services IoT solution, has now launched commercially with several projects on the platform. The company expects this solution to contribute to the synergy between the IoT product business and the cloud & connectivity business, with improved attachment rates between the businesses, the company explained.
"Whilst there are short-term uncertainties for all businesses with regard to underlying consumer demand, Telit remains well positioned to capitalise on growth opportunities over the medium and longer term," Telit Communications said.
Telit Communications remains confident in its ability to deliver full-year profitability, in line with its own expectations.
The stock was down 2.1% at 151.00 pence each on Tuesday morning in London.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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