The share price of Tadir-Gan (Precision Products) 1993 Ltd. (TASE: TDGN) has risen steeply yesterday and today after the company reported a framework agreement signed by its subsidiary Ortal Diecasting with a new customer. Under the agreement, Ortal has been appointed the sole supplier of magnesium parts to German car maker Audi, of the Volkswagen group.
The framework agreement is worth $15 million (NIS 47 million) over five years. Ortal Diecasting will produce the magnesium components for Audi electric cars due to enter into serial production in the first half of 2022.
Tadir-Gan CEO Eran Tibon said he was proud to add Audi to the list of car makers using Ortal products. "Ortal's products have been serving leading vehicle manufacturers like General Motors and MAN for many years, and the addition of a manufacturer from the Volkswagen group is an important step for us.
"This agreement is especially important for being intended for use in electric vehicles. The switch from gasoline powered vehicles to electric vehicles in which there is high sensitivity to vehicle weight boosts the attractiveness of Ortal's products since magnesium is a material with a low specific weight, and we believe that more electric vehicle manufacturers will choose to switch to magnesium components."
In July 2021, the DBSI-Brin group, owned by Barak Dotan and Yossi Ben Shalom, became the controlling shareholder in Tadir-Gan, after receiving the controlling stake in the company (54.61%) without consideration from FIMI Opportunity Funds. DBSI-Brin will make future conditional payments of up to $10 million to FIMI Opportunity Funds on the basis of its receipts from Tadir-Gan after returning its investment in the company.
In 2018-2020, Tadir-Gan posted an aggregate operating loss of $5.8 million and a net loss of $24.64 million, mainly as a result of the cessation of business of its German subsidiary. In 2020, the company also suffered a 31% decline in revenue to just $17.9 million, which it said was mainly a result of the effect of the coronavirus pandemic on its customers.
In the first half of 2021, Tadir-Gan's revenue rose 5.5% to $10.1 million, but higher raw materials and power costs cut its EBITDA 43% to $553,000. The company posted a net loss of $3.15 million for the first half year, mostly resulting from one-time expenses of $2.5 million.
Published by Globes, Israel business news - en.globes.co.il - on December 20, 2021.
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