Satellite networking technology companyGilat Satellite Networks (Nasdaq: GILTF ) today reported its fourth quarter results, and it seems that the company has managed to improve its situation. Revenues for the fourth quarter of 2001 were $89 million. The company's net loss for the quarter was $10.9 million or $0.47 per share. Gilat also reported that it used $3.8 million in cash during the quarter, beating expectations.
Gilat poor annual results are due mainly to its huge loss of $276 million in the third quarter, largely attributable to tremendous write-offs of $247 million. The company lost the fabulous sum of $398 million in the whole of 2001.
Gilat Chairman and Chief Executive Officer Yoel Gat said, "Results for the quarter are in line with expectations. Our approach has resulted in better-than-expected cash flow for the quarter, improving our financial position and stability. We are continuing to align our cost structure and expect strong deal flow going forward in 2002. In all, we are in a favorable position to benefit from what we expect will be improving global economic conditions in 2002."
Although Gilat’s third-quarter loss was smaller, the company’s real test will be the repayment of its huge debts. Gilat had $110 million cash at the end of the fourth quarter of 2001, while its financial liabilities, including $350 million worth of convertible bonds, amounted to $666 million. How will Gilat repay its debts? It will probably have to sell assets and switch to a positive cash flow soon. Gilat’s bondholders will apparently have to exercise a lot of patience before the company pays up.
Gilat also announced today that it had signed a new contract for approximately $9.7 million with Fondo de Inversion en Telecomunicaciones del Peru (FITEL) to provide a DialAw@y IP fixed rural satellite telephony network that will serve more than 1,600 communities throughout Peru. The contract is the third awarded by FITEL to Gilat over the past year, representing the provision of rural satellite telephony service to more than 6,000 Peruvian communities. Deployment of the new 1,600-site network has begun and is scheduled to reach completion by the end of 2002.
Published by Israel's Business Arena on 19 February, 2002