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Telit swings to profit in decent 2019
17th Mar 2020 13:19
(Sharecast News) - Internet-of-things (IoT)-focussed technology company Telit Communications reported an 8.3% rise in group revenues, excluding automotive business revenues, to $382.8m in its full-year results on Tuesday.
The AIM-traded firm said total group revenues, including a two month contribution from the sold automotive business, were $392.5m for the 12 months ended 31 December, down from $427.5m.
IoT cloud and connectivity revenues were 20.2% higher at $41m, driven by a "strong performance" of both the connectivity and the IoT platforms businesses.
Adjusted EBITDA was ahead 26.9% at $38.2m, with $15.3m of research and development capitalisation.
The firm reported operating profit of $63.6m, including $54.5m related to the capital gain from the sale of the automotive business, swinging from an operating loss of $33.4m.
Telit's adjusted EBIT rose to $16.9m from $2.3m.
It said its profit before tax was $59.9m, swinging from a loss of $39.8m, while its adjusted profit before tax totalled $13.2m, compared to a loss of $4.1m in 2018.
Basic earnings per share came in at 36 US cents, up from 27.9 cents, and adjusted earnings per share were 12.5 cents, turning around last year's loss of 3.8 cents per share.
Telit reported profit in cash of $11.7m, compared to a loss of $3.6m, with the board putting the "substantial improvement" of $15.3m down to its focus on cash generation.
Net cash at year-end stood at $48.2m, compared to net debt of $34m a year earlier.
Cash flow generated from operating activities, before movements in working capital, totalled $34.6m, rising from $14.8m.
On the operational front, Telit noted the successful completion of the sale of its automotive business, including the finalisation of the working capital adjustment.
It implemented its cost optimisation plan during the year, with the full effect to be realised in 2020, and executed its first live 5G testing for the industrial-grade 5G product.
The company also made a further investment in OneEdge, its integrated hardware and services offering, which was designed to enable enterprises to manage IoT integration and scalability.
Telit introduced its new 'Low Power Wide Area' (LPWA) cellular modules, based on the Qualcomm 9205, ME910G1 and ME310G1 products, and extended 'SimWISE;, which it described as embedded sim technology in its 2G, LTE-M and NB-IoT modules.
A new production agreement was signed with a tier 1 contract manufacturer in Vietnam, the board added, with mass production expected to start in the second quarter of 2020.
"2019 saw significant improvement in our results thanks to Telit's positive transformation in recent years," said chief executive officer Paolo Dal Pino.
"We continued to refocus our business towards industrial IoT products and solutions as well as to optimise our operations and cost base.
"The benefits of these initiatives are visible in our 2019 performance and will bear further fruit in the future."
Dal Pino said the sale of the firm's automotive business in February was an "important milestone" in the strategy and, following the disposal, it was now in a "strong" financial position to address "any" extraordinary challenges.
"Our progress in transforming Telit has also helped prepare the business for addressing the Covid-19 situation.
"Our number one priority is the safety of our employees and we have implemented remote working initiatives to allow our team to maintain service levels while minimising risks.
"Our year-to-date trading has not been materially affected in terms of customer demand, while supply chain constraints experienced early in the quarter at our electronics manufacturing partner in China are being resolved rapidly."
Dal Pino explained that demand from customers had remained in line with its expectations at the current stage, but added that the board could not estimate how long the crisis around Covid-19 would last, or what impact it would have on the market.
"This could affect future demand from customers.
"We are monitoring the situation closely and are taking all necessary actions to minimise the impact on our full year targets of any supply chain pressures or changes in customer demand."
Paolo Dal Pino said Telit's "drive" to become a "leading" end-to-end IoT provider had been, and would continue to be, powered by key developments such as its software suite OneEdge.
"We will continue to build on the momentum of recent years with the help of our employees around the world.
"We remain confident in our ability to continue to deliver improved operational and financial performance."
At 1312 GMT, shares in Telit Communications were down 8.25% at 73.4p.
The AIM-traded firm said total group revenues, including a two month contribution from the sold automotive business, were $392.5m for the 12 months ended 31 December, down from $427.5m.
IoT cloud and connectivity revenues were 20.2% higher at $41m, driven by a "strong performance" of both the connectivity and the IoT platforms businesses.
Adjusted EBITDA was ahead 26.9% at $38.2m, with $15.3m of research and development capitalisation.
The firm reported operating profit of $63.6m, including $54.5m related to the capital gain from the sale of the automotive business, swinging from an operating loss of $33.4m.
Telit's adjusted EBIT rose to $16.9m from $2.3m.
It said its profit before tax was $59.9m, swinging from a loss of $39.8m, while its adjusted profit before tax totalled $13.2m, compared to a loss of $4.1m in 2018.
Basic earnings per share came in at 36 US cents, up from 27.9 cents, and adjusted earnings per share were 12.5 cents, turning around last year's loss of 3.8 cents per share.
Telit reported profit in cash of $11.7m, compared to a loss of $3.6m, with the board putting the "substantial improvement" of $15.3m down to its focus on cash generation.
Net cash at year-end stood at $48.2m, compared to net debt of $34m a year earlier.
Cash flow generated from operating activities, before movements in working capital, totalled $34.6m, rising from $14.8m.
On the operational front, Telit noted the successful completion of the sale of its automotive business, including the finalisation of the working capital adjustment.
It implemented its cost optimisation plan during the year, with the full effect to be realised in 2020, and executed its first live 5G testing for the industrial-grade 5G product.
The company also made a further investment in OneEdge, its integrated hardware and services offering, which was designed to enable enterprises to manage IoT integration and scalability.
Telit introduced its new 'Low Power Wide Area' (LPWA) cellular modules, based on the Qualcomm 9205, ME910G1 and ME310G1 products, and extended 'SimWISE;, which it described as embedded sim technology in its 2G, LTE-M and NB-IoT modules.
A new production agreement was signed with a tier 1 contract manufacturer in Vietnam, the board added, with mass production expected to start in the second quarter of 2020.
"2019 saw significant improvement in our results thanks to Telit's positive transformation in recent years," said chief executive officer Paolo Dal Pino.
"We continued to refocus our business towards industrial IoT products and solutions as well as to optimise our operations and cost base.
"The benefits of these initiatives are visible in our 2019 performance and will bear further fruit in the future."
Dal Pino said the sale of the firm's automotive business in February was an "important milestone" in the strategy and, following the disposal, it was now in a "strong" financial position to address "any" extraordinary challenges.
"Our progress in transforming Telit has also helped prepare the business for addressing the Covid-19 situation.
"Our number one priority is the safety of our employees and we have implemented remote working initiatives to allow our team to maintain service levels while minimising risks.
"Our year-to-date trading has not been materially affected in terms of customer demand, while supply chain constraints experienced early in the quarter at our electronics manufacturing partner in China are being resolved rapidly."
Dal Pino explained that demand from customers had remained in line with its expectations at the current stage, but added that the board could not estimate how long the crisis around Covid-19 would last, or what impact it would have on the market.
"This could affect future demand from customers.
"We are monitoring the situation closely and are taking all necessary actions to minimise the impact on our full year targets of any supply chain pressures or changes in customer demand."
Paolo Dal Pino said Telit's "drive" to become a "leading" end-to-end IoT provider had been, and would continue to be, powered by key developments such as its software suite OneEdge.
"We will continue to build on the momentum of recent years with the help of our employees around the world.
"We remain confident in our ability to continue to deliver improved operational and financial performance."
At 1312 GMT, shares in Telit Communications were down 8.25% at 73.4p.