Controp, owned in equal shares by Aeronautics Ltd. (TASE:ARCS) and Rafael Advanced Defense Systems Ltd., will supply products and services to an Asian country for $31 million, Aeronautics today reported to the Tel Aviv Stock Exchange (TASE).
Controp develops and manufactures special lenses and cameras installed on unmanned aerial vehicles (UAVs), among other things, Aeronautics' main sphere of business. The contract is for 20 months. The proceeds will be paid to Controp according to milestones set in the agreement.
Aeronautics' share price responded today with a 10% jump, but has fallen nearly 60% over the past year, pushing the company's market cap down to NIS 430 million.
Aeronautics, based in Yavne, develops and manufactures UAVs, observation balloons, bomb fuses, and advanced navigational systems. It is controlled by the KCPS, Viola, and Bereshit funds. The company CEO is Amos Mathan and the chairperson is former Israel Navy commander and former Rafael CEO Vice Admiral (res.) Yedidia Yaari, who recently replaced former Israel Air Force commander Maj. Gen. (res.) Eitan Ben Eliyahu.
Aeronautics became a public company in the summer of 2017 after the investment funds that controlled it made an offer for sale of over NIS 400 million for the company. At the same time, the company also issued NIS 53 million worth of new shares to Leumi Partners, which led the offering. Trading in Aeronautics' shares began at a market cap of over NIS 1 billion.
The offering generated an impressive exit for the shareholders, headed by the Bereshit and KCPS funds (each of which held 27% of Aeronautics' shares) and the Viola fund (23.4%), which sold nearly half of their holdings to the public. CEO Matan sold shares in the company for NIS 5.8 million in the offering and Ben Eliyahu sold shares for NIS 6.5 million.
R&D expenses were up and the company lost money
Aeronautics' finished the first quarter with NIS 31 million in revenue, 5% less than in the first quarter of 2017. The company posted a $1.2 million operating loss in the quarter, compared with an $858,000 operating profit in the corresponding quarter last year, partly as a result of higher R&D expenses. Aeronautics' first quarter net loss was $1.8 million, compared with a $180,000 net profit in the first quarter of 2017.
Aeronautics' business was affected by an affair revealed in August 2017 involving the company, following which the Ministry of Defense suspended the company's license to market and export Aeronautics' 1K Oribiter UAV to an important customer in a foreign country (the gag order on the affair is still in force, after a criminal investigation into the affair was begun last November).
Published by Globes [online], Israel business news - www.globes-online.com - on July 2, 2018
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