10th Sep 2015 08:21
LONDON (Alliance News) - Water treatment and filtration systems company Amiad Water Systems Ltd on Thursday said its pretax profit more than doubled in the first half as its restructuring efforts and cost-cutting boosted margins and offset a slight decline in its revenue.
Amiad's pretax profit for the six months to the end of June was USD3.5 million, up from USD1.7 million a year earlier, despite revenue coming in at USD59.2 million, down slightly from USD60.2 million. The profit improvement was driven by the restructuring efforts the group made last year and by cost-cutting, which mean its gross margin improved to 40.1% from 39.4%.
The revenue decline was driven by weakness in the group's industrial and municipal end markets, which offset growth for its irrigation and oil and gas sales. Industrial sales were down due to weakness in most regions, particularly in China, while municipal sales were hit by a lack of investment in major projects by local authority customers.
Irrigation revenue was up, however, and is the largest contributor to group revenue, while oil and gas sales rose sharply.
"We are pleased with the significant growth in the Irrigation and Oil & Gas segments - based on our latest products - which largely served to mitigate the weakness in the Industrial and Municipal segments. In addition, thanks to the implementation of the restructuring and cost cutting exercise, we were able to improve gross margins, reduce operational expenses and strengthen the foundations of the business. As a result, we achieved our goal of getting back to being profitable," said Chief Executive Arik Dayan.
Dayan said the company has entered the second half with a robust order book, driven by the irrigation and oil and gas growth, and said it is confident it will meet market expectations for the full year, despite macroeconomic challenges facing its industrial and municipal markets.
Shares in Amiad were untraded on Thursday, having last traded at 150.00 pence.
By Sam Unsted; [email protected]; @SamUAtAlliance
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