group Tadiran Group , which deals in the import and sale of air conditioners, alongside the distribution of products in the solar energy field, concludes 2022 with an increase in revenues, but a decrease in net profit. This is the year when the company’s rapidly developing activity in the field of renewable energy overtook the traditional air conditioner activity for the first time in revenue and operating profit.
At the end of January, Tadiran issued a warning that it would end the fourth quarter with a loss of up to NIS 30 million. This is due to an increase in financing expenses, as a result of an increase in the value of the option and the performance-contingent consideration for the seller of the Italian VP solar, as well as due to the management’s decision to continue to realize in the fourth quarter inventory in the consumer goods sector (air conditioners), which was purchased for the purpose of early preparation for the global supply crisis, and at a high price, as a result of a significant increase in prices in the procurement and transportation costs.
At the conclusion of the year, Tadiran recorded a 58% increase in revenue to NIS 2.3 billion, thereby surpassing the sales target it set for itself three years ago and which it planned to achieve in 2025, but the quarterly loss dropped the annual net profit by 38% to NIS 87.2 million.
As mentioned, during the fourth quarter Tadiran sold an expensive inventory of air conditioners, and this eroded the gross profit rate, which amounted to 15.5% compared to 21.9% in the corresponding quarter in 2021. In addition, the company made a commitment in respect of a put option related to the purchase of the Italian company VP Solar – which eroded the bottom line in the reports by approximately NIS 45 million.
As mentioned, the bottom line recorded a loss of NIS 30 million, compared to a profit of approximately NIS 31 million in the corresponding quarter. Tadiran’s stock has eroded by 36% in the past year and it reflects the company’s market value of NIS 2.6 billion.
The consumer products division, which is responsible for the sale of air conditioners in Israel, recorded revenues of NIS 1 billion, while the energy division, which deals with the import, distribution and trade of solar energy products, recorded revenues of NIS 1.28 billion, thus bypassing the company’s traditional field of activity. The same is true of the operating profit from the two areas, which was NIS 88 million and NIS 126 million respectively.
Moshe Mamrod, the CEO and controlling owner of Tediran, stated that after the company exceeded the revenue target it had set for 2024, it is presenting a new strategic plan. According to him, the company will work “to double the revenue to approximately NIS 4.5 billion by 2026 – that is, in four years – with Operating profitability of 10%-11%. The plan is based on the expansion of the group’s existing activities and expresses our long-term confidence in the strength and leadership of the group.”
The new plan, “Tadiran 2026”, also includes an outline in which a target was set for an operating profit in the range of NIS 450-495 million in 2026, i.e. 10%-11% operating profitability, and this compared to an operating profit of approximately NIS 214 million in 2022, which reflected profitability operational of 9.4%.