Telit Communications narrows loss as hardware revenues leap

The Internet of Things enabler reported a loss before tax of $39.8m for 2018, a reduction of 30% compared to the year before, as revenue increased by 14% to $427.5m and selling and marketing expenses dipped by 12% to $59.1m.

Hardware revenues increased by 20% to $192.4m after growth in all regions, particularly in the US where the AIM traded company said it is in a good position to enjoy revenue growth at a higher rate than in other markets, while Cloud and Connectivity revenues jumped by 23% to $34.1m following strong growth in Europe, the Middle East and Africa.

Paolo Dal Pino, executive chairman of Telit, said: "We made significant financial progress last year. We delivered double digit revenue growth, saw a major improvement in the cash generation and stabilising gross margins - returning to cash profit in H2-2018. We also further rationalised our operational structure, better integrated our products and services and reshaped the IoT Platform organisation."

Telit sold its Automotive division for $105m, completing the transaction in February, while further operational streamlining came from the integration of the hardware and services businesses, and continued cost optimisation that had led to the reduction in expenses.

Cash and cash equivalents stood at $35.0m at the end of the year, down from $41.9m at the same point the year before.

"We are well positioned to exploit the growth opportunities in the fast growing and dynamic IoT market. With improved operational structure, we expect our financial performance to significantly improve as our revenue grows, and we see the benefits of a reduced cost base, strong balance sheet and stabilising gross margins," said Dal Pino.

Telit Communications' shares were down 4.24% at 162.80p at 0950 BST.