Ethernity Networks targets cash positivity in 'transformative' 20245 Dec 2023 11:57
Ethernity Networks Ltd (AIM:ENET, OTCQB:ENETF) said it expects 2024 to be a “transformative year” and despite its recent challenges expects to report improved revenues and reduced losses for the current calendar year.
The supplier of crucial technology for networking appliances said full-year revenue is likely to come in at around US$3.6-3.8 million, compared with US$2.97 million last year, with underlying gross profit rising to US$2.4-2.6 million from US$1.59 million as gross margins widen to 67-68% from 54%.
On an EBITDA basis, a loss of no more than US$3.8 million is expected, down from US$6.4 million last time.
Monthly operating costs have been more than halved to US$0.3 million for this month, compared to US$0.66 million in June.
With a cash balance of just under US$1 million, along with further cash receipts due, boosted by recent contracts, the company said it expects to agree a settlement with creditors and exit the temporary suspension of proceedings (TSP) process it has been in since fighting began in Israel in September.
Directors are also mulling different funding options to strengthen the balance sheet, which is seen as likely to boost the company’s ability to secure more large contracts.
On the basis that the company can successfully exit the TSP and conclude an “extremely challenging year”, chief executive David Levi said the focus for 2024 is already on generating more sales of its Universal Edge Platform (UEP), where he said the technical team are “working tirelessly to release the UEP products with the required functionalities for our targeted customers”.
He said Ethernity is “hopeful that 2024 will be a transformative year for Ethernity and, with our careful cost control on the reduced operating cost base, our goal is to generate positive cashflow”.
The hopes for next year are based on making further commercial progress with UEP, together with the Fibre Access offering, which is targeting the US$50 billion passive optical network (PON) market, and solutions for the 5G open RAN market.
Ethernity’s UEP products, which are based on underlying technologies from the company that have been deployed in more than 950,000 different systems, are currently being evaluated by several OEMs, the company said, looking to further access a global market for carrier ethernet access devices estimated to be valued at US$17.2 billion in 2022.
https://www.proactiveinvestors.co.uk/companies/news/1035172/ethernity-networks-targets-cash-positivity-in-transformative-2024-1035172.html
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