13 Dec 2019 07:00
13 December 2019
Amiad Water Systems Ltd.
("Amiad" or the "Company")
Trading Update
Amiad (AIM: AFS), a leading global producer of water treatment and filtration solutions, provides the following update on trading for the year ending 31 December 2019.
As noted in the Company's interim results announcement on 11 September 2019, Amiad entered the second half of 2019 with a higher order book and larger sales pipeline than at the same point of the previous year. During the second half of the year, the Company was successful in converting this pipeline into sales and expects to achieve revenue growth for full year 2019 over 2018. However, owing to a number of global macroeconomic factors, in particular those impacting the Americas, certain projects did not proceed due to a lack of capital investment. As a result, the Company expects its revenue for full year 2019 to be slightly below market expectations.
The Company has continued to be impacted by currency fluctuations, particularly the New Israeli Shekel against the US Dollar as well as the strengthening of the US Dollar against other local currencies, resulting in a reduction in revenue and gross margin. In addition, the lower-than-anticipated sales in the second half have meant that the Company has not been able to offset the impact on gross margin of the large, lower-margin projects completed in the first half of the year.
As noted in the Company's interim results, the adoption of IFRS 16 has a negative impact on the Company's reported net profit, including a negative currency impact on finance costs resulting from the revaluation of the operating leases that are denominated in the New Israeli Shekel. The Company expects its reported net profit for full year 2019 to be materially impacted by the adoption of IFRS 16.
As a result of the lower-than-expected revenue, the gross margin pressures and the impact of the adoption of IFRS 16, the Company expects net profit for full year 2019 to be $3m-$5m below market expectations.
Looking ahead, the Company expects to enter 2020 with a higher backlog than at the same point in the prior year and is experiencing encouraging sales activity. In addition, as previously noted, the Company continues to focus on implementing measures to increase internal efficiency and reduce its cost base. As a result, the Board continues to look to the future with optimism.
The Company will provide fuller details at the time of its full year results.
This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.
Enquiries
Amiad Water Systems Ltd. |
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Dori Ivzori, Chief Executive Officer Avishay Afriat, Chief Financial Officer | +972 4 690 9500 |
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Stifel Nicolaus Europe Ltd. |
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Stewart Wallace, Ben Maddison | +44 20 7710 7600 |
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Luther Pendragon |
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Harry Chathli, Claire Norbury, Rachel So | +44 20 7618 9100 |
About Amiad
Amiad Water Systems (AIM: AFS) is a leading global producer of automatic, self-cleaning water treatment and filtration products and systems. Through its engineering skills and ability to innovate, Amiad provides cost-effective "green" solutions for the irrigation and industrial purposes. In these markets, its unique and high-quality products are being integrated into the core of systems for filtration and water treatment, micro irrigation and membrane protection, wastewater and potable water treatment, cooling systems and sea water filtration.
Headquartered in Israel, Amiad provides these solutions through ten subsidiaries and a comprehensive network of distributors to customers in more than 80 countries.
For additional information or product details, please visit www.amiad.com.