Ethernity profits dive amid slow transition to virtual networking

7th Sep 2018 09:26

(Sharecast News) - Ethernity Networks on Friday reported a decrease in first half gross profits and revenues as the company transitions towards working with virtual networking and security applications.For the six months ended 30 June, the ethernet applications firm reported a gross profit of $0.3m, down 65% from the same period last year, and revenue of $0.4m, down 55%.The AIM traded company had cash balance of $11.9m at 30 June, down from $18.2m at the same point in 2017.David Levi, chief executive of Ethernity, said: "The first half results are in-line with our expectations with the focus being on the company moving from an IP/technology provider to a solutions provider for virtual networking and security appliances. They reflect also marketplace delays around the virtualized networking environment that we have elaborated on earlier in the year."Ethernity said its swing to an EBITDA loss of $1.1m from positive EBITDA of $0.4m was primarily due to its investment in sales and marketing and research and development activities, while general administrative expenses also increased."The company has also invested in advancing the current technology to support higher throughput and additional functionality, targeted at Tier 1 original equipment manufacturer's (OEM) products, that can generate clear growth and forecasts not just for smart NIC (network interface controller) but also for the IP/ technology business," said Levi.A recent contract win with a US tier 1 OEM is expected to result in ongoing royalty streams in the coming years, while the company has also completed development of its new 100Gb ACENIC100 hardware since the end of the period.Ethernity's shares were down 5.26% at 27.00p at 1033 BST.