Telit wins $30m smart meter Dutch deal

Yosi Fait
Yosi Fait

The company will supply CDMA 450 MHz modules for a smart electrical network project in the Netherlands.

Telit Communications plc (AIM:TCM) is continuing its business expansion. The company, whose market cap is $596 million, has won a contract valued at $30 million to supply CDMA 450 MHz modules to a leading global electricity meter manufacturer for a smart electrical network project in the Netherlands.

Telit's Internet of Things (IoT) modules are at the core of a new generation of smart electricity meters that Dutch utility companies will deploy nationwide over five years starting in 2016, with most of the meters being supplied in the earlier years. IoT technology enables power companies to achieve a better balance between supply and demand at times of high and low demand, and eventually to reduce total consumption, thereby saving money for consumers.

According to Telit, the rugged one-channel CE910-SL module is designed especially for areas in which CDMA450 coverage exists as a commercial mobile network operation, or where it can be licensed for development as a private network by utilities, emergency response organizations, and other similar government and private groups.

Telit launched the CE910-SL earlier this year, at the same time that a market was created when a number of European governments granted 450 MHz spectrum. The company thereby became the first to undertake large-scale projects like that slated for the Netherlands. The CE910-SL also provides specific performance within buildings, making it an ideal solution for smart electricity meters, which are sometimes installed deep within residential buildings and shopping centers. Telit has been in the CDMA sector since 2006, and offers the broadest line of products in that sector.

"The CE910-SL is a remarkable success story for us. It went from concept to commercial product in less than a year; and qualified us uniquely to supply to projects like this one in the Netherlands,” said Telit president and finance director Yosi Fait. "This is also a great example of how well equipped Telit is to take advantage of these types opportunities in the dynamic IoT market."

Encouraging annual forecast

Telit is the world's leading machine to machine (M2M) player. Its technology can transmit information between two electronic systems using mobile communications (mainly cellular), without human involvement. Furthermore, in the Internet and IoT era, every device, system, and service will be connected to a network, and M2M technology like Telit's is already becoming an integral part of this revolution.

Telit posted $156.3 million in revenue in the first half of 2015, an annualized increase of 13.1% (the company is required to issue reports every six months). The IoT solution, the company's growth engine, generated $11.1 million in revenue, a 20.6% annualized increase. The growth in revenue from this solution is reflected in its proportion of total revenue - 7.1% in the first half of the year, compared with 6.7% in the corresponding period last year.

Telit's EBITDA (earnings before interest, taxes, depreciation and amortization) totaled $21.8 million, compared with $17 million in the corresponding period in 2014. Cash flow from current activity also improved significantly, from $12.7 million to $20.7 million. The company's balance sheet lists no debt.

For the first time in its history, these results led the company to publish a rather encouraging forecast for 2015: $347-354 million in revenue (19.2% annual growth), and $42 EBITDA of $42-47 million (an EBITDA margin of 12.7%).

Published by Globes [online], Israel business news - www.globes-online.com - on October 8, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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