Ethernity Networks Ltd (LON:ENET) hailed operational progress in its first year as a listed company but the company admitted its financial performance had disappointed.
The internet data handling specialist, which listed in June of last year, said that in keeping with the experience of its peers, it had taken longer than anticipated to land sales contracts as a result of which it had failed to meet expectations in terms of revenue and operation profit for 2017.
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Profit before tax eased to US$159,471 in 2017 from US$250,821 in 2016 on revenue of US$1.52mln (2016: US$2.16mln).
The profit figure was dented to the tune of US$127,790 by foreign exchange fluctuations while there was also the unexpected collapse of a US$225,000 deal signed in December, although this particular customer has indicated it intends to resurrect the contract deal in the second half of this year.
Furthermore, two additional contracts anticipated for 2017 were delayed to 2018 resulting in a loss of planned revenues of US$250,000. Current discussions on these contracts are ongoing and the intention is that the scope of the contracts will be larger than originally thought.
The company continues to focus on the development and delivery of its SmartNIC solutions and key agreements are under discussion for significant partnerships that will fuel growth, it said.
At the same time, Ethernity continues to drive new technologies and business for technology and intellectual property licensing in other telecom markets, such as mobile, broadband, cable and wireless, while also targeting vertical markets such as the avionics and automotive sectors.
“Even given operator delays in the implementation of their chosen NFV [network function virtualisation] solutions to which we are or will be a provider, the blend of the current company offerings targeting existing markets, allows the company to continue generating cash flow from its operations, thus maintaining a strong financial position,” said David Levi, the chief executive officer of Ethernity.
“I remain extremely confident that Ethernity is the best-placed solutions provider to meet the operator demands and that our long-term goals will be met and exceeded, delivering our shareholders with exceptional returns,” he added.
Shares ion Ethernity were down 0.27p at 3.65p in the first hour of trading.