Amiad Water Systems Ltd has returned to profitability, according to its full year results for the twelve months ended 31 December 2015 published today, while its UK subsidiary is expected to be a major player in the non-irrigation segment in Europe.

A statement issued by the company said that a restructuring exercise, improved efficiencies and consequential higher-than-expected cost savings had resulted in Amiad achieving its goal of returning to profitability.

Profit before tax increased significantly to $6.7m (2014: $0.4m loss, while operating profit more-than-trebled to $8.8m (2014: $2.9m). Revenue was broadly flat at $118.8m on a reported basis (2014: $118.5m).

The company said its largest growth was seen in Europe, the Middle East and Africa region (EMEA) where sales increased by approximately 15% driven by large projects carried out in the Irrigation and Oil & Gas segments.

Growth in sales of new products was maintained, accounting for approximately 9% of revenues (2014: c. 7%), while irrigation segment sales accounted for 46.6% of total revenue.  In Q4 2015, Amiad signed an exclusive distribution agreement with Netafim, a global leader in smart irrigation solutions for sustainable productivity, which is expected to be a significant contributor to  revenue during 2016. Netafim will market Amiad’s Arkal product lines for the irrigation market in numerous countries outside of Israel as part of its filtration offering.

During 2015 Amiad established a wholly-owned subsidiary in the UK to support the increasing demand for clean water solutions in the UK and Europe. Its operations are based in Swansea, Wales and it is the company’s first permanent base in the UK.

Previously, Amiad’s products and solutions were sold through its distributor based in Swansea. The new subsidiary, Amiad Water Systems UK Ltd, reports to Amiad Europe, and provides marketing and technical support functions. Amiad UK has already contributed to sales and the company expects the UK subsidiary to be a major player in the non-irrigation segment in Europe.

Commenting on the results, Arik Dayan, Chief Executive Officer of Amiad, said:

“We are pleased that the business demonstrated solid underlying growth as sales of new products and our traditional automatic filters increased worldwide. The sales of new products helped improve our gross margin and this, combined with our restructuring programme, meant that we achieved our goal of returning to profitability.

“Irrigation continued to be the main growth segment along with Oil & Gas also showing good growth. The global macro-economic conditions continued to have an impact on large infrastructure municipal projects and the Industrial segment suffered primarily due to slowdown in the mining industry in Australia and China.”

“In 2016, we continue to demonstrate progress and maintain tight cost control. However, we are cautious about the potentially negative impact of global macro-economic conditions, currency headwinds and uncertainty due to the US elections. We expect the Irrigation segment to continue to be the main contributor to revenue, supported by the partnership with Netafim.”

“ The Municipal segment is anticipated to return to growth, and there are increased orders from India and China in the Industrial segment compared with last year. In the Oil & Gas segment, 2015 was an exceptionally good year, however, in 2016 we expect a reduction in projects due to the effect on the industry from lowered oil prices. As a result, the fundamentals of the business remain sound and the management team continues to drive the business forward.”

Amiad Water Systems is a leading global producer of automatic, self-cleaning water treatment and filtration products and systems for the industrial, municipal, irrigation, oil & gas and ballast water markets.  In these segments its patented products are being integrated into the core of systems for filtration and water treatment, micro irrigation and membrane protection, wastewater and potable water treatment, cooling systems and sea water filtration.

Headquartered in Israel, Amiad provides these solutions through nine subsidiaries and a comprehensive network of over 170 distributors to customers in more than 80 countries.