HaloSource, Inc., the global clean water technology solutions company trading on London’s AIM, has announced its interim results for the six months ended 30 June 2016.

Total revenues during the period from continuing operations decreased by 48% to $1.4 million, largely due to manufacturing related production stoppages at one of the firm’s key customers in China (unrelated to product supplied to the customer by HaloSource), resulting in customer orders of approximately $750,000 not being shipped in the period. This was only partially offset by stronger than anticipated performance by HaloSource’s second largest partner, Lonsid, which continues to expand the use of HaloPure cartridges for biofilm control in its reverse osmosis devices, a new area of opportunity for the company.

Gross margin from continuing operations was -10%, down from +20% for the same period last year, representing the impact of reduced sales from the customer, HaloSource’s largest. Sales were also impacted by lower than expected revenues from major customers in India and Latin America, 

Operating expenses from continuing operations for H1 2016 totalled $5.2 million, down from $5.4 million in H1 2015. 

Headquartered in the US with operations in China and in India, HaloSource, Inc. has been awarded more than 30 patents for its ground breaking chemistries, which provide safe drinking water for more than 10 million consumers globally.

HaloSource is highlighting the fact that  issues of drinking water contamination and drinking water availability continue to present a global challenge which only grows with each year.  The company is currently in the final stages of commercialising a unique, patent-pending cartridge based solution for achieving lead reduction performance that meets or exceeds the NSF 53 lead reduction standard for gravity devices (pitchers and bottles). 

While currently focused on lead reduction, the firm said the development of this technology will also provide the HaloPure brand with a second technology platform, which has the flexibility to offer high-performance reduction of other chemical contaminants in gravity applications as well.

Beyond gravity applications, HaloSource also expects that the media offering will deliver performance advantages versus other alternative solutions for chemical contamination reduction in pressurised applications, commenting:

“We are confident that once commercialised, this technology will have far-ranging global application and can make a significant impact on the lives of consumers dealing with chemical and heavy metals contamination. This new technology platform, coupled with our focus on penetrating the fast-growing Reverse Osmosis markets in China and India continues to reinforce the optimism we feel for the future performance of the business.”

Commenting on the latest results, Martin Coles, President and CEO of HaloSource, said:

"In order to focus exclusively on our class leading, bromine based, contact kill biocide solution for drinking water contamination we exited two of our three business segments during the first six months of 2016.”

“In doing so we have significantly reduced our operating costs and realigned our resources to focus exclusively on the growth of our Drinking Water business and accelerate our strategy of becoming the technology solutions provider of choice for multi-national companies operating in the Drinking Water sector.”

“The Company remains committed to accelerating the commercialisation of our unique, proprietary water purification technologies by leveraging both the go-to-market capacity of our existing customer base and the new customers we expect to add at the regional level.  Against this backdrop, we expect to deliver gross margin expansion and tight control of operating expenses in addition to revenue growth while significantly decreasing the revenue required to generate positive cash flow on a consolidated basis.”