19th Jun 2018 10:25
LONDON (Alliance News) - Network processing technology developer Ethernity Networks Ltd said Tuesday its performance for 2017 was "disappointing" and "did not meet expectations", as it posted a drop in revenue and profit.
As a result of the news, shares in the company fell 9.8%, trading at 41.50 pence each on Tuesday.
For 2017, the company's revenue decreased 32% to USD1.5 million from USD2.2 million the year before.
Pretax profit dropped 36% to USD159,471 from USD250,821 in 2016.
The company blamed the poor results on a number of reasons "some of which will nonetheless result in long-term benefits", it said.
Ethernity said that a significant customer changed its business relationship from component-based business to royalty-based business, resulting in a gross revenue and gross margin decline of USD630,000 and USD334,000 respectively.
Furthermore, another significant customer "experienced contractual difficulty with their customer", which resulted in a decline in Ethernity's business with them during the year.
This was the first set of results since the company's listing in June last year, when it raised net cash of USD17.8 million.
Ethernity doesn't pay a dividend.
Chairman Graham Woolfman said: "Whilst the company made strong operational progress in the year, the financial performance of the business has been disappointing.
"It is apparent that while 2018 will be a year of challenges to steadily develop customer partnerships and relationships, this will lay the groundwork for the company to achieve its goals for 2019 onward."
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