Amiad Filtration H1 profit up, sees full-year in line

Amiad Filtration H1 profit up, sees full-year in line

Bangalore: Israel-based Amiad Filtration Systems Ltd on Monday reported a 5% rise in first-half pretax profit and said it expected full-year results to be in line with market expectations.

While the irrigation market remains unstable in the second half, the demand for its products is set to continue in new territories as well as its established markets in the municipal and industrial segments, the company said.

“We will be in (the range of) market expectations, which is around $70-$71 million of revenue, but it is very hard to predict as the irrigation is still slow," chief executive officer Arik Dayan told Reuters.

He said the company continued to manage its costs tightly.

Amiad, which has targeted India as its main growth area in 2009, said it was very optimistic about India as it expected the industrial growth in the country was set to continue.

India is a very important major market for us and the programme is going on progressively, Dayan said.

The maker of filtration systems for industrial, municipal and irrigation markets reported a pretax profit of $5.7 million for the six months to 30 June, compared with $5.4 million a year ago. Revenue fell 7 % to $36.8 million.

The company said it maintained its interim dividend at 3.5 cents per share.

Amiad shares fell 4% in morning trade.

“The shares moved beforehand also because we did not rush it out as a ‘buy´. The company tries to retain some caution. Lastly, I do not think that there is too much activity in the shares due to a public holiday weekend in Israel," Panmure Gordon & Co analyst Oliver Wynne-James told Reuters.

Wynne-James raised his price target on the stock to 210 pence from 148 pence citing a better margin outlook, but retained a “hold" rating.

The analyst left his 2009 revenue forecast unchanged at $71.6 million but expected a 0.3% improvement in gross margin at 46.8% and overheads reduced to $25 million.

Amiad shares were down 4% at 165 pence at 0930 GMT on the London Stock Exchange.