Ethernity Networks published its first financial reports as a public company late last week. The company, which has been listed on the AIM Stock Exchange in London since late June, reported a drop in revenue in the first half of 2017, but substantial improvement in its gross profit margin and higher EBITDA.
Ethernity Networks, managed by founder and CEO David Levi, provides technological solutions that use programmable hardware to enhance communications networks performance. The company's revenue in the first half of the year totaled $989,000, down 24.5%, compared with the first half of 2016. The company's gross profit margin was 86.7% of turnover, compared with 50.6% in the corresponding period last year. The company attributed this improvement to a change in its product mix, with revenue from royalties giving the company a profit margin of almost 100%.
Ethernity Networks' operating expenses grew 22%, and its operating profit increased by 44.1% to $380,000. The company's relatively high financing expenses caused a 194% drop in net profit to $441,000. In contrast to the first half of 2016, Ethernity Networks had a positive $189,000 cash flow in the first half of this year. At the end of the period, following the completion of its IPO on AIM, in which Ethernity Networks raised £15 million, the company had $18.2 million in cash.
"The first half saw a series of achievements and culminated in the company's successful AIM IPO and £15 million of new investment subscribed by UK-based investment funds," Levy stated. He added that the company had presented a new product during this period, and had won three design contracts that would help it increase its profit margins. Ethernity Networks held its IPO at a £1.40 share price and a company value of £45 million. Shortly afterwards, the company's share price rose to a peak of £1.91 (a £62 million market cap), but receded, and the stock was traded today at £1.78 per share, giving a £58 million market cap.
Published by Globes [online], Israel Business News - www.globes-online.com - on September 17, 2017
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