Amiad Water Systems to cut jobs after contract delays

18th Nov 2014 16:15

Shares in Amiad Water Systems sprang a leak on Tuesday after contract delays forced the water treatment equipment supplier to warn on profits and announce job cuts. The stock floated 35.5p or 18.3% lower to 158p as Amiad, which supplies industrial, municipal, irrigation, and oil and gas customers, said its developing markets were facing delays or cancellations of some orders.The company said it expected to report revenue 2-6% below market expectations in the range of $118m-122m compared with $118.9m in 2013. It added that as it has fixed operating expenses, it expected the revenue decline to have a greater impact on net profit."Whilst these orders are of a small size, the cumulative effect means that the revenue for the full year is now expected to be lower than market expectations," Amiad said in a trading update.Amiad said it had agreed an immediate restructuring and cost-cutting exercise to reduce operating costs and increase profitability in 2015.It said it planned to slash operational expenses and job numbers in sales and marketing and other expenses at its headquarters to save about $4m in 2015. It also expects to incur one-off restructuring costs of about $700,000.The group also said it expected currency volatility to cost it about $1.4m."As a result of reduced revenue, the currency fluctuation and one-off restructuring expense, the company now expects to report between a net loss of $1m and net profit of $1m compared with market expectations of $4m," it said.