Amiad unveils results for its 'best year ever'

Israel-based filtration company Amiad Water Systems said 2012 was its "best year ever" as revenues and profits climbed on the back of robust growth in municipal, ballast water and oil and gas segments.

Israel-based filtration company Amiad Water Systems said 2012 was its "best year ever" as revenues and profits climbed on the back of robust growth in municipal, ballast water and oil and gas segments.

The AIM-listed water treatment group reported an 11.8% increase in revenues to $131.1m for the year to December 31st 2012, compared to $117.3m the previous year. Broker Nomura, however, said revenue missed its forecast by 1.0%.

The municipal division contributed 13.6% of the company's revenues, while ballast water and oil and gas accounted for 4.4% and 3.3% respectively.

Operating profit was $10.6m, up from $8.9m in 2011, while profit before tax rose to $10.1m from $8.3m. Gross margins were at 43% compared to 44% the prior year.

Net debt at year end was $17.1m, down $4.6m from $21.7m in 2011, mainly due to strong cash flow from operations.

The group proposed a final dividend of $0.06 gross per share, up from $0.055 gross per share a year earlier

"It was the best year ever for Amiad," Chief Executive Officer, Arik Dayan, told Sharecast.

"Despite difficulties in the US and European markets were able to sustain growth."

A better-than-expected turnover in Australia offset the slowdown in the US and Europe, he added. Amiad scored two contracts in Australia worth $8.0m and $1.6m, respectively, for reverse osmosis and pre-filtration membrane protection for projects in desalination and oil and gas industries.

However, the firm experienced a decline in China due to weakness in the still mill markets which traditionally drove results. Nevertheless, sales in municipal, oil and gas and irrigation increased in the nation.

Dayan said the company has managed to keep its head above water in a tough economic climate by positioning itself across a number of different territories and segments. Latin America, Brazil, China and India have been identified as significant growth markets.

Looking ahead, the firm plans to invest in new markets, particularly in oil and gas, and develop new products.

Headwinds in the US and Europe are expected to continue to impact the first half of the year as large water infrastructure projects suffer delays in investment. A slight increase in revenue for the full-year 2013 is expected.

Nomura eased caution over the growth rates in the first half of 2013 but maintained its 'buy' rating given the solid cash performance.

"The cautious outlook over growth will mean a revision to our revenue forecasts (currently for 10% in 2013E [estimate] when low single digits now seems more prudent barring more large contracts, whose timing is hard to predict)," the broker said.

"However the ability to manage costs and improve efficiency and cash generation was evident in the H2 vs. H1 above and therefore the group's optimism for continuing growth in earnings in 2013E seems well supported."

Shares fell 0.93% to 318.50p at 11:30 on Wednesday.

RD

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