Sources inform ''Globes'' that Eden-Telecom president Brig.-Gen. (res.) Giora Inbar is expected to resign his position shortly. Inbar, who headed Eden Telecom since its founding three years ago, is expected to join Polar Investments' new initiative as partner and manager. Polar Investments is a shareholder in Eden Telecom. Inbar will also become a director at Eden Telecom and participate in devising company strategy.
Eden Telecom provides auto vehicle location (AVL) services via a nationwide communications network. As part of its activity, the company markets Pointer, an advanced system for vehicle security and location. The communications network also provides command and control, telemetric and wireless data transfer services.
After two years of heavy losses, (approximately NIS 80 million since its inception), Eden Telecom implemented efficiency measures last year that are reflected in company results for the current year thus far. Despite a 40% drop in new car sales, which has affected the AVL sector adversely, Eden Telecom ended the first quarter with increased revenue, positive cash flow from routine operations, and its first operating profit.
Sale in the first quarter were about NIS 9 million. Revenue for all of 2001 was NIS 32.4 million, compared with 19.4 million in 2000. Last year's net loss - NIS 27.7 million - included one-time depreciation charges on surplus merchandise, and NIS 6.7 million in write-offs attributed mainly to Eden Telecom's October 2000 merger with Safecom.
Eden Telecom's heavy losses, which grew even larger after the merger, led to the aforementioned efficiency measures. Workforce was slashed from 160 to 90. At the same time, the company stopped its policy of subsidizing customers so as to increase market share, and instead began putting an emphasis on creating positive cash flow. When that was achieved, in the fourth quarter of 2001, the company stopped relying on shareholder loans. In the first quarter of 2002, the company had a positive cash flow of NIS 875,000.
Operating profit in the first quarter 2002 was NIS 108,000 compared with a NIS 1.6 million operating loss in the previous quarter. The bottom line is still a NIS 1.4 million net loss for Q1 2002, but this is significantly less that in previous quarters.
Published by Globes [online] - www.globes.co.il - on 30 April, 2002