Ilex Medical Ltd. (TASE:ILX), which markets medical equipment in Israel and other countries, has announced the signing of an agreement with Magen David Adom (MDA). Ilex Medical will replace MDA's existing systems for testing blood units with more up-to-date systems. The agreement will generate an estimated $37 million in revenue for Ilex Medical over seven years, with a three-year extension option. The agreement is an extension of a previous agreement with MDA.
Ilex Medical currently controls the blood unit testing supply market in Israel. The company's share price rose 2% following the announcement, pushing the company's market cap up to NIS 408 million. Ilex Medical's financial reports said that the company's income in the first nine months of 2016 totaled NIS 388 million, 8.3% more than in the corresponding period in 2015. The profit assigned to the company shareholders was NIS 21.8 million, compared with NIS 26.4 million in the corresponding period in 2015.
The decline started with the company's gross profit, to which a rise in management and general expenses was added. Ilex Medical said that its gross profit margin fell due to a relatively low gross profit margin at the outset of a multi-year project with Meuhedet Health Services, and a decrease in the proportion of the company's revenue derived from its profitable business in South Africa.
Revenue from Ilex Medical's Medtechnica Ltd. (TASE: MEDI) subsidiary also rose, but gross and net profit fell, due to a change in the mix of products. Ilex Medical founder and chairman Moshe Ben Shaul owns 70% of the company, and many of his relatives are among its managers. His salary policy has been criticized over the years, and the company had to negotiate last January with investment institutions for approval of the company's remuneration policy, which makes it possible to pay the CEO a base salary of up to NIS 160,000 and a capital bonus of the same amount. The remuneration policy was eventually approved, even though most of the shareholders who were not parties at interest opposed it.
Published by Globes [online], Israel Business News - www.globes-online.com - on March 9, 2017
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