Half-year Results

MTI Wireless Edge Ltd (AIM: MWE), the technology group focused on comprehensive communication and radio frequency solutions across multiple sectors, is pleased to today announce its financial results for the six month period ended 30 June 2024.

'Solid H1 - well placed for continued growth'

Financial highlights

• Revenues level at US$22.3m (H1 2023: US$22.3m)
• 18% increase in EBITDA* to US$3.3m (H1 2023: US$2.8m)
• Profit before tax increased 10% to US$2.3m (H1 2023: US$2.1m)
• Earnings per share increased 8% to 2.14 US cents (H1 2023: 1.99 US cents)
• Strong financial position maintained with net cash standing at US$5.5m on 30 June 2024 (31 December 2023: $8.1m) after payment of dividend (US$2.7m) and purchase of shares (US$0.6m) via the buyback facility during H1 2024
• Expansion of buyback programme effective from 22 August 2024 with increased funding from £0.7m to a maximum of £1.0m

*Earnings before interest, tax, depreciation and amortisation.

Operational highlights

• The Antenna division delivered a 16% increase in sales, driven by strong demand from the defence sector and for the Group's 5G backhaul antenna solution. There is a significant order backlog for both military antennas and 5G, plus an increased number of opportunities in the pipeline which provides reasonable visibility of future revenues.
• Domestic sales for Mottech were slower during this period as a result of the conflict, combined with some weakening in North America and Western Europe, leading to an 11% decrease in revenues. Nevertheless, profitability for the period was substantially higher, reflecting a higher margin business mix, some currency benefits and successful price increases. Q3 trading has started well and prospects in Europe for Q4 onwards, in particular, look positive.
• MTI Summit increased sales by 1%, held back by lower than expected revenues from PSK. Profitability was below the same period in last year after absorbing losses from PSK. The core business continues to perform well, tendering a good range of new designs and is well placed to pick up more contract wins in the future. PSK has had a challenging period, and to address this PSK reduced staff numbers in August 2024 to help offset current losses, whilst continuing to pursue an attractive new business pipeline.
• Outlook: Demand for products is high and enquiry levels for potential future projects is at an all time high, largely relating to the global defence sector.

Moni Borovitz, Chief Executive Officer of MTI Wireless Edge, said:

"Demand for good communication utilising radio frequency solutions across the water, defence and 5G industries remains high. Our range of products are well positioned in each of these industries and we are experiencing strong enquiry levels, most notably in the defence sector. Our trading performance in H1 shows a good increase in profitability and strong cash generation, combined with maintaining our firm financial base. We are therefore well placed for the current year. Not surprisingly, the conflict in Israel is having some impact on local market revenues although we did experience better deal flow in July and hopefully we will see the end to this conflict soon."

We have delivered a solid trading performance for the first six months of the year. A key change has been the increase in new business prospects. Enquiry levels have risen substantially over the past 10 months particularly from the defence sector. These enquiries have now turned into new and potential new projects and as a result our new business pipeline is substantially higher than in 2023. We are therefore in a good overall position and remain focused on developing the opportunities in all three of our diversified but complementary divisions.

Antenna division

H1 was a strong trading period and the trend has continued into Q3, driven by the combination of demand for both military antenna and the Group's 5G backhaul antenna solution. Not surprisingly, defence spending has risen across the world following the outbreak of multiple conflicts. Orders for military antennas, while critical to all defence operations, tend to lag behind orders for other types of military equipment. We have experienced a strong flow of orders and opportunities, which have resulted in a healthy order backlog and pipeline of opportunities for military antennas, which underpins our confidence in trading for the full year for this division.

In H1 there was a good uplift in orders for the 5G backhaul antenna solution. However, it remains hard to predict the timing of future revenue levels for this product. That being said, the substantial prospects for it remain unchanged, as all cellular operators continue to be committed to establishing 5G networks. The pace of installation is the main variable, but at some point in the nearer-term future there will be a step change in order levels consistent with the widespread roll-out of 5G by multiple operators.

The ABS® antenna solution, which ensures the antenna adapts to any small movements caused by different climate conditions, is a relatively new solution responsible for bringing MTI to the attention of multiple new Tier 1 and Tier 2 potential customers. All of whom are conducting tests to prove the solution's viability. It has been an important door opener to a valuable new customer base and increases the likelihood of MTI being able to sell its other 5G backhaul solutions to them as well.

Water Control & Management division

This division provides wireless control systems to manage irrigation and water distribution for agriculture, municipal authorities and commercial entities. It operates under the Mottech brand and utilises part of the hardware technology from Motorola, integrated with the Company's own proprietary management software. Our solutions reduce water and power usage, whilst providing higher revenue from accurate irrigation, leading to an increased number and improved quality of crops cultivated.

Revenues for this division reduced by 11%, primarily due to lower activity levels in Israel and some weakening in the North American and Western European markets. Conversely, profitability from this division rose substantially. This was due to a significantly better gross margin, driven by high margin products, lower marketing costs and a positive impact from currency exchange and the implementation of successful price increases.

The domestic Israeli market has been impacted by the current conflict, with local municipalities understandably prioritizing other areas over water management. The revenue shortfall mainly involved lower margin work and since the half-year we have seen the situation resolve itself, with normal demand levels resuming.

Similarly, while Europe and North America had a slow start, orders for the second half of the year have improved and new opportunities for both markets are positive. This, together with early indications from a new technical solution we are offering, provides us with confidence in this part of the business.

The long-term driver for this division is the continuing global problem of water scarcity. 2.2 billion people still live without access to safely managed drinking water and 3.5 billion lack access to safely managed sanitation*. Using water efficiently is at the heart of Mottech's solution and the problem of water scarcity is no longer restricted to underdeveloped countries located close to the equator, with the issue now being a real threat across parts of Europe where water levels are dangerously low. Technologies, such as those deployed by Mottech, are key to the long-term solution.

*UNESCO report published on behalf of UN Water March 2024

Distribution & Professional Consulting Services division

Operating under the MTI Summit Electronics brand, this division exclusively represents approximately 40 international suppliers of radio frequency/microwave components and sells these products to Israeli customers. Expert knowledge of both the international suppliers and customers further enables MTI to act as a consultant to all parties and assist with devising complete radio frequency/microwave solutions.

MTI Summit performed well, delivering a 1% increase in revenues notwithstanding lower revenue levels at PSK, which also negatively contributed to a reduction in its profitability. PSK experienced a challenging trading period and was loss making in H1. In response, we have reduced its cost base even though PSK's pipeline of opportunities does contain some significant possibilities, which could accelerate its recovery. Requests to MTI Summit for design solutions have increased, which is creating a good pipeline of potential design wins, some of which are quite material and likely to drive its growth in 2025.

Share buyback programme

The board decided to increase the Company's share buyback programme effective from 22 August 2024 and hold the shares purchased for a longer period of time. The board agreed to increase the funds that can be used under the share buyback programme from £0.7m to £1.0m as it believes strongly in the prospects of the business.

Outlook

Demand for our products is high and enquiry levels for potential future projects is at an all time high, largely relating to the global defence sector. Trading in Q3 has been positive so far and we are hopeful of securing some material contracts in the second half of the year. Overall, the business is well placed with good visibility on potential future contracts which will support the prospects for the business into 2025 and beyond.

About MTI Wireless Edge Ltd. ("MTI")

Antenna division

Water Control & Management division

Distribution & Professional Consulting Services division

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

INTERIM CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME

Other comprehensive income (loss) net of tax:

Items that will not be reclassified to profit or loss:

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENTS OF

CHANGES IN EQUITY

For the six month period ended June 30, 2024 (Unaudited):

Attributable to owners of the parent

Changes during the six month period ended June 30, 2024:

Comprehensive income

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENTS OF

CHANGES IN EQUITY (CONT.)

For the six month period ended June 30, 2023 (Unaudited):

Attributable to owners of the parent

Changes during the six month period ended June 30, 2023:

Comprehensive income

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONT.)

For the year ended December 31, 2023 :

Attributable to owners of the parent

The accompanying notes form an integral part of the financial statements.

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

INTERIM CONSOLIDATED STATEMENTS OF

FINANCIAL POSITION

The accompanying notes form an integral part of the financial statements.

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

INTERIM CONSOLIDATED STATEMENTS OF

FINANCIAL POSITION

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

The accompanying notes form an integral part of the financial statements.

INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS (cont.)

The accompanying notes form an integral part of the financial statements.

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - General:

Corporate information:

The Company and its subsidiaries are engaged in the following areas:

• Development, design, manufacture and marketing of antennas for the military and civilian sectors.

Note 2 - Significant Accounting Policies:

The interim consolidated financial statements as of June 30, 2024 have not been audited.

On April 9, 2024, the IASB published IFRS 18 'Presentation and Disclosure in Financial Statements' which replaces IAS 1 Presentation of Financial Statements and is mandatorily effective for annual reporting periods beginning on or after January 1st, 2027. The main changes are as follows:

Note 2 - Significant Accounting Policies - (CONT.):

• Mandatory sub totals to be presented in the profit and loss account.
• Aggregation and disaggregation of information including the introduction of overall principles for how information should be aggregated and disaggregated in financial statements.
• Disclosures related to management defined performance measures (MPMs).

The Company is currently assessing the impact of this new accounting standard and amendment.

Note 3 - REVENUES:

(*) at the point in time

(**) over time

Note 4 - operating SEGMENTS:

The following tables present revenue and profit information regarding the Group's operating segments for the six month period ended June 30, 2024 and 2023 respectively and for the year ended December 31, 2023.

Six month period ended June 30, 2024 (Unaudited):

Note 5 - SIGNIFICANT EVENTS:

• On January 5, 2024, following approval at an extraordinary shareholders' meeting, the Company granted 600,000 share options to Mr. Moshe (Moni) Borovitz, the Chief Executive Officer, and 100,000 share options to Mr. Dov Feiner, the General Manager of the Company's Antenna Division. The expense for share-based payments (such as stock options) typically appears on the income statement as part of the Company's operating expenses.
• The Board of directors declared a cash dividend of 3.1 US cents per share, being approximately $2,745,000. This dividend was paid on 11 April 2024 to shareholders on the register at the close of trading on 22 March 2024.
• The financial statements for the year ended 31 December 2023 were authorized for issue by the Board following their approval on 10 March 2024.
• On 24 January 2019, the Company announced a share repurchase program to conduct market purchases of ordinary shares of par value 0.01 Israeli Shekels each ("Ordinary Shares") in the Company up to a maximum value of £150,000 (the "Programme") and on 10 March 2024 the Board of directors of the Company and the board of directors of MTI Engineering decided to extend the Programme effective from

Note 5 - SIGNIFICANT EVENTS (CONT.):

12 March 2024 until 31 March 2025 and to increase the maximum value of the Programme to up to £700,000, with the intention to hold the Ordinary Shares purchased for a longer period of time. As at 30 June 2024, 1,298,000 Ordinary Shares were held in treasury under the Programme. As of the date of this report, 1,648,000 Ordinary Shares were held in treasury under the Programme.

F. On 7 October 2023 Israel was attacked by the Hamas terror organization leading to war in the Gaza region and Israel. The war has led to a slowdown in the Israeli economy and if this war continues for a prolonged period, then it may begin to impact the Company. The wide usage of military reserve personnel, adverse foreign currency exchange rates and restrictions on access to certain areas in Israel are risks which may affect the Company if there is a prolonged period of war. As of the date of this report, and to the best of the Company's knowledge, the war has not had a significant effect on the Company. The Company continues to review the effects of the war on its trading as it believes that if the war continues for a long period of time then the overall Israeli economy will be effected, and factors including the lack of available manpower, interest rates and foreign currency exchange rates may have an impact on its trading.

NOTE 6 - SUBSEQUENT EVENTS:

• On 20 August 2024, the Board of directors of the Company and the board of directors of MTI Engineering decided to increase the maximum value of the Programme to up to £1,000,000, with the intention to hold the Ordinary Shares purchased for a longer period of time.