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(Alliance News) - Shares fell in MTI Wireless Edge Ltd on Monday after announcing that it expects profit for 2021 to be below market expectations.
Shares in the Israel-based technology company were 9.0% lower at 61.88 pence on Monday in London.
For the year as a whole, MTI Wireless said it expects gross profit to meet market expectations at USD13.5 million, a 3.1% increase from USD13.1 million in 2020, on revenue which is on-track to meet expectations with a 5.6% increase to USD43.2 million from USD40.9 million, driven by increased sales and strong cash generation.
However, significant currency fluctuations over the year, in particular the strength of the Israeli shekel compared to the US dollar led to higher staff costs across MTI's Israeli-based operations.
As a result, operating profit is expected to increase by 9% from USD4.1 million, falling below market expectations.
With currency fluctuations and non-cash expenses, pretax profit for 2021 is expected to fall below market expectations, and remain broadly flat when compared to 2020's figure of USD4.1 million.
In spite of this, MTI Wireless still anticipates paying a final dividend for the year.
"Our profitability has been skewed mainly by currency changes, but in cash terms we have performed well. Our orderbook and pipeline of opportunities are currently meeting our internal plans for 2022 and since the start of 2022 the US Dollar has strengthened against the Shekel and is currently above our internal budget rate. We consider that we are well placed to continue to grow in 2022," said Chief Executive Officer Moni Borovitz.
MTI Wireless will publish its annual results on March 7.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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