Israeli company to manufacture swimming pool cleaning robots Maytornix Co., Ltd. (level:MTRN) continues to disappoint investors on the Tel Aviv Stock Exchange (TASE) by reporting another quarter of disappointing results, and cutting guidance for the second straight quarter.
As a result, the company’s share price is currently down 20%, giving it a market value of NIS 1.27 billion, down 85% from its peak of NIS 7.8 billion at the end of 2021.
The company is controlled by Kibbutz Jezreel, which has 300 members and owns a 56% stake in it worth NIS 730,000, down from its peak of NIS 5 billion.
At the same time as it posted its weak results, the company announced that CFO Mene Maimon would step down in October — a position he had assumed at the end of 2021.
Mytronics now expects annual revenue for 2024 to be between NIS 1.6 billion and NIS 1.8 billion, down 5% to 15% from 2023, while previous guidance had forecast a decline of only 2% to 4%. The company also lowered its gross profit forecast to 39% to 40% of revenue.
In the second quarter of 2024, Mytronics reported revenues of NIS 607 million, down 17% from the same quarter last year. Net profit fell to 41% of revenues from 42% last year and operating profit fell 43% to NIS 73.3 million. Net profit was NIS 43.2 million, down 53% from last year.
Extreme weather and competition from China
The company attributes the drop in sales and especially profits to rising interest rates, which are causing potential buyers to reconsider purchasing pool cleaning robots. This is reflected in distributors, who are stocking fewer robots as they try to sell off existing inventory. According to the company, the drop in inventory at distributors is not only not slowing down, but “it has intensified over the past year as the supply chain seeks to reduce excess inventory that has built up since the end of Covid.”
In addition, Mytronics also notes that “extreme weather has delayed the start of the swimming pool season in Europe and North America over the past two years,” while “the promotion of online channels at the expense of traditional distribution channels” has forced companies, including Mytronics, to cut prices.
This price drop is also due to the entry of cheaper Chinese robots into the market. “On the Internet, competition has intensified significantly in recent years with the entry of a large number of Chinese players, offering good value offers at a wide range of prices, while investing heavily in digital marketing,” the company says.
This article was published in Globes, Israeli Business News – en.globes.co.il – on August 21, 2024.
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