ITURAN PRESENTS FOURTH QUARTER & FULL YEAR 2023 RESULTS
- Ituran Location and Control Ltd. (NASDAQ: ITRN) raised its dividend policy by 60% to $8 million per quarter.
- Full year 2024 EBITDA guidance is set at $90-95 million, with a target to exceed $100 million in EBITDA by 2025.
- In 2023, Ituran achieved record financial metrics, including $320.0 million in revenue, $48.1 million in net income, and $87.0 million in EBITDA.
- The Company added 186,000 subscribers in 2023, reaching a total of 2,252,000 subscribers by year-end.
- None.
Insights
The announcement by Ituran Location and Control Ltd. of a 60% increase in its dividend policy to $8 million per quarter is a clear signal of management's confidence in the company's financial health and its commitment to shareholder returns. This strategic move is likely to be well-received by investors and could potentially lead to a positive re-rating of the stock. The increase in dividends, combined with the strong operating cash flow of $77.2 million and a robust net cash position of $53.0 million, underscores Ituran's solid liquidity and operational efficiency. Furthermore, the guidance for 2024 with an EBITDA expectation of $90-95 million and a target to exceed $100 million in 2025 reveals a strong growth trajectory, assuming stable macroeconomic and political conditions.
From a valuation standpoint, the increased dividend and positive guidance may lead to a re-evaluation of the company's future cash flows, potentially affecting its price-earnings ratio. Investors will be keen to monitor whether Ituran can maintain its subscriber growth momentum, which saw an addition of 186,000 in 2023 and manage the potential risks associated with currency fluctuations, as seen with the impact of the Argentinean Peso devaluation and the Israeli shekel's temporary weakness against the US Dollar.
Ituran's record financial metrics, including a 9% year-over-year revenue increase, reflect a strong demand for its location-based services and products. The company's ability to grow its subscriber base significantly, even amidst macroeconomic challenges and a temporary halt in hardware installations due to the outbreak of war in Israel, demonstrates resilience and effective market penetration strategies. The balance between subscription fees, which saw a 12% increase and product revenues is indicative of a diversified revenue stream that can buffer against market volatility.
It is essential to contextualize the company's performance within the broader industry trends. The location-based services market is expected to grow, driven by advancements in technology and increased adoption in various sectors, including automotive and asset tracking. Ituran's focus on expanding its OEM subscriber base, although smaller in comparison to the aftermarket, positions the company to capitalize on the integration of its services into new vehicles, a segment poised for expansion as connected car technology becomes more prevalent.
Ituran's financial results and forward-looking statements must be analyzed against the backdrop of the current global macroeconomic environment. The company's performance, particularly in the context of currency devaluations and geopolitical tensions, suggests a robust operational model. However, the assumption that the macroeconomic and political situation will not significantly worsen is critical to achieving the projected EBITDA targets. Investors should consider the potential impact of inflationary pressures, interest rate changes and political instability on Ituran's future financials.
The company's strong net cash position and minimal debt provide a cushion against economic downturns, which could be a strategic advantage if the global economy faces headwinds. Additionally, the substantial increase in the dividend policy could be viewed as a defensive move to attract and retain investors in a potentially turbulent market, offering a steady income stream amidst possible capital gains volatility.
Dividend Policy increased by
AZOUR,
Highlights of Full Year 2023
- Number of subscribers reached 2,252,000 at year-end adding a record 186,000 in 2023 in line with guidance;
- Record financial metrics across the board with revenue at
$320.0 million 9% year-over-year; - Net income of
$48.1 million 30% year-over-year; - EBITDA of
$87.0 million 10% year-over-year; - Generated
$77.2 million - Year-end net cash position and marketable securities of
$53.0 million - Returns to shareholders: declared a total of
$19 million $6.6 million
Highlights of the Fourth Quarter of 2023
- Net subscriber growth of 42,000 with a net increase in aftermarket subscribers of 38,000 and a net increase in OEM subscribers of 4,000;
- Revenue reached
$77.8 million 4% increase year-over-year; - Net income increased to
$12.0 million 26% year-over-year; - EBITDA grew to
$21.9 million 7% increase year-over-year; - Operating cash flow of
$21.8 million - The Board increased the dividend policy by
60% to$8 million
Guidance for 2024
Overall, looking ahead to 2024, management's expectations are for continued revenue growth and profitability.
Management expects to add approximately 35,000 to 40,000, net new subscribers per quarter during 2024.
From a financial perspective, Ituran introduces EBITDA guidance. 2024 EBITDA expectations are between
Furthermore, the Board of Directors announced a significant increase in the dividend policy, as detailed below.
Management Comment
Eyal Sheratzky, Co-CEO of Ituran, said, "We are very pleased with our record results for 2023 across the board, capping the year with a strong fourth quarter which demonstrates Ituran's resilience and strength. This is especially true against the background of significant global macro challenges in recent quarters and in
Continued Mr. Sheratzky, "We are very pleased with Ituran's solid and growing profitability as well as the record cash generation in our business throughout 2023. We are therefore very happy to share these continuing fruits of our success and reward our loyal shareholders for their long-term support of our company. We announced a very significant increase in our regular quarterly dividend payout to shareholders, totaling
Fourth quarter 2023 Results
Revenue for the fourth quarter of 2023 was
Revenues from subscription fees were
The subscriber base expanded to 2,252,000 by the end of December 2023, marking an increase of 42,000 from the previous quarter and 186,000 year-over-year. During the quarter, there was an increase of 38,000 net in the aftermarket subscriber base and an increase of 4,000 net in the OEM subscriber base.
Product revenues were
Gross profit for the quarter was
The gross margin in the quarter on subscription revenues was
Operating income for the quarter was
EBITDA for the quarter was
Financial expenses for the quarter were
Net income for the fourth quarter of 2023 was
Cash flow from operations for the fourth quarter of 2023 was
Full Year 2023 Results
Revenues for 2023 were a record
Revenues from subscription fees were
Gross profit for the year was
Operating profit for 2023 was
EBITDA for 2023 was
Net income in 2023 was
Cash flow from operations for the year was
On the balance sheet, as of December 31, 2023, the Company had cash, including marketable securities, of
Dividend
The Board of Directors announced an increase in the dividend policy starting from the fourth quarter of 2023. This follows the Company's continuing strong profitability, ongoing positive cash flow and strong balance sheet.
The Company increased the quarterly dividend to
Buy Back
On August 23, 2022, Ituran announced that its Board of Directors made the decision to continue executing on the
As of December 31, 2023, there is remaining under the buy-back program
Conference Call Information
The Company will also be hosting a conference call later today, Thursday, February 29, 2024 at 9am Eastern Time.
On the call, management will review and discuss the results, and will be available to answer investor questions.
To participate, please call one of the following teleconferencing numbers. Please begin placing your calls a few minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.
US Dial-in Number: 1 866 860 9642
ISRAEL Dial-in Number: 03 918 0609
INTERNATIONAL Dial-in Number: +972 3 918 0609
at:
9:00am Eastern Time, 6:00am Pacific Time, 4:00pm Israel Time
For those unable to listen to the live call, a replay of the call will be available from the day after the call in the investor relations section of Ituran's website.
Certain statements in this press release are "forward-looking statements" within the meaning of the Securities Act of 1933, as amended. These forward-looking statements include, but are not limited to, our plans, objectives, expectations and intentions and other statements contained in this report that are not historical facts as well as statements identified by words such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates" or words of similar meaning. These statements are based on our current beliefs or expectations and are inherently subject to significant uncertainties and changes in circumstances, many of which are beyond our control. Actual results may differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors, as well as factors related to the global COVID-19 pandemic.
About Ituran
Ituran is a leader in the emerging mobility technology field, providing value-added location-based services, including a full suite of services for the connected-car. Ituran offers Stolen Vehicle Recovery, fleet management as well as mobile asset location, management & control services for vehicles, cargo and personal security for the retail, insurance, financing industries and car manufacturers. Ituran is the largest OEM telematics provider in
Ituran's subscriber base has been growing significantly since the Company's inception to over 2.2 million subscribers using its location-based services with a market leading position in
For more information, please visit Ituran's website, at: www.ituran.com.
Logo: https://mma.prnewswire.com/media/1972820/Ituran_logo.jpg
Company Contact
Udi Mizrahi
udi_m@ituran.com
Deputy CEO & VP Finance, Ituran
(
International Investor Relations
Ehud Helft
ituran@ekgir.com
EK Global Investor Relations
(US) +1 212 378 8040
ITURAN LOCATION AND CONTROL LTD. | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
US dollars | ||||
December 31, | ||||
(In thousands) | 2023 | 2022 | ||
Current assets | ||||
Cash and cash equivalents | 53,434 | 27,850 | ||
Investments in marketable securities | 119 | 316 | ||
Accounts receivable (net of allowance for doubtful accounts) | 45,390 | 45,821 | ||
Other current assets | 52,724 | 48,156 | ||
Inventories | 26,872 | 28,509 | ||
178,539 | 150,652 | |||
Long-term investments and other assets | ||||
Investments in affiliated companies | 714 | 1,188 | ||
Investments in other companies | 2,213 | 1,779 | ||
Other non-current assets | 3,989 | 3,129 | ||
Deferred income taxes | 14,452 | 11,400 | ||
Funds in respect of employee rights upon retirement | 18,525 | 15,146 | ||
39,893 | 32,642 | |||
Property and equipment, net | 41,955 | 45,598 | ||
Operating lease right-of-use assets, net | 8,071 | 9,905 | ||
Intangible assets, net | 10,830 | 12,620 | ||
Goodwill | 39,400 | 39,510 | ||
Total assets | 318,688 | 290,927 | ||
ITURAN LOCATION AND CONTROL LTD. | ||||
US dollars | ||||
December 31, | ||||
(In thousands) | 2023 | 2022 | ||
Current liabilities | ||||
Credit from banking institutions | 355 | 11,845 | ||
Accounts payable | 20,842 | 21,937 | ||
Deferred revenues | 27,117 | 21,783 | ||
Other current liabilities | 44,150 | 37,407 | ||
92,464 | 92,972 | |||
Long-term liabilities | ||||
Long term loan | 237 | 345 | ||
Liability for employee rights upon retirement | 24,562 | 21,224 | ||
Deferred income taxes | 1,116 | 1,534 | ||
Deferred revenues | 13,259 | 13,036 | ||
Operating lease liabilities, non-current | 4,774 | 6,886 | ||
Others non-current liabilities | 2,027 | 2,071 | ||
45,975 | 45,096 | |||
Stockholders' equity | 174,454 | 145,797 | ||
Non-controlling interests | 5,795 | 7,062 | ||
Total equity | 180,249 | 152,859 | ||
Total liabilities and equity | 318,688 | 290,927 | ||
ITURAN LOCATION AND CONTROL LTD. | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||
US dollars | US dollars | ||||||||
Year ended | Three months period | ||||||||
(in thousands | December 31, | ended December 31, | |||||||
except per share data) | 2023 | 2022 | 2023 | 2022 | |||||
Revenues: | |||||||||
Telematics services | 234,541 | 209,558 | 59,426 | 53,887 | |||||
Telematics products | 85,437 | 83,514 | 18,382 | 21,061 | |||||
319,978 | 293,072 | 77,808 | 74,948 | ||||||
Cost of revenues: | |||||||||
Telematics services | 98,707 | 90,129 | 25,080 | 22,674 | |||||
Telematics products | 68,110 | 65,381 | 14,328 | 16,421 | |||||
166,817 | 155,510 | 39,408 | 39,095 | ||||||
Gross profit | 153,161 | 137,562 | 38,400 | 35,853 | |||||
Research and development expenses | 16,986 | 16,848 | 4,240 | 4,616 | |||||
Selling and marketing expenses | 13,643 | 13,327 | 3,535 | 3,302 | |||||
General and administrative expenses | 56,635 | 48,705 | 14,305 | 12,574 | |||||
Other expenses (income), net | (58) | (92) | (185) | 57 | |||||
Operating income | 65,955 | 58,774 | 16,505 | 15,304 | |||||
Other income, net | 2 | - | 5 | - | |||||
Financing expenses, net | (1,552) | (5,944) | (1,653) | (1,292) | |||||
Income before income tax | 64,405 | 52,830 | 14,857 | 14,012 | |||||
Income tax expenses | (13,355) | (12,745) | (2,534) | (3,747) | |||||
Share in profit (losses) of affiliated companies, net | (706) | (585) | 116 | (173) | |||||
Net income for the period | 50,344 | 39,500 | 12,439 | 10,092 | |||||
Less: Net income attributable to non-controlling interest | (2,207) | (2,397) | (420) | (520) | |||||
Net income attributable to the Company | 48,137 | 37,103 | 12,019 | 9,572 | |||||
Basic and diluted earnings per share attributable to Company's stockholders | 2.40 | 1.82 | 0.60 | 0.47 | |||||
Basic and diluted weighted average number of shares outstanding (in thousands) | 20,061 | 20,418 | 19,959 | 20,242 | |||||
ITURAN LOCATION AND CONTROL LTD. | ||||
US dollars | US dollars | |||
Year ended | Three months period | |||
(in thousands) | 2023 | 2022 | 2023 | 2022 |
Cash flows from operating activities | ||||
Net income for the period | 50,344 | 39,500 | 12,439 | 10,092 |
Adjustments to reconcile net income to net cash from operating activities: | ||||
Depreciation and amortization | 21,068 | 20,134 | 5,407 | 5,263 |
Loss in respect of marketable securities and other investments | 89 | 3,860 | 32 | 20 |
Increase (decrease) in liability for employee rights upon retirement | 2,507 | 1,243 | 226 | (58) |
Share in losses (profit) of affiliated company, net | 706 | 585 | (116) | 173 |
Deferred income taxes | (3,125) | (737) | (1,430) | (622) |
Capital losses (gain) on sale of property and equipment, net | 89 | (224) | 54 | 80 |
Decrease (increase) in accounts receivable | (26) | (5,104) | 1,769 | (812) |
Decrease (increase) in other current and non-current assets | (3,169) | (11,055) | 940 | (832) |
Decrease (increase) in inventories | 1,102 | (5,835) | 201 | 2,975 |
Increase (decrease) in accounts payable | (1,863) | 1,419 | 1,090 | (1,157) |
Increase in deferred revenues | 5,703 | 2,169 | 935 | 1,162 |
Increase (decrease) in other current and non-current liabilities | 3,793 | (837) | 232 | (370) |
Net cash provided by operating activities | 77,218 | 45,118 | 21,779 | 15,914 |
Cash flows from investment activities | ||||
Increase in funds in respect of employee rights upon | ||||
retirement, net of withdrawals | (2,384) | (868) | (451) | (320) |
Capital expenditures | (14,243) | (26,505) | (4,050) | (7,747) |
Investments in affiliated and other companies, net | (800) | (1,076) | (244) | (386) |
Proceed from (repayment of) long term deposit | (100) | 147 | 40 | 60 |
Sale of (Investment in) marketable securities | 99 | (103) | - | - |
Proceeds from sale of property and equipment | 199 | 1,051 | 55 | 203 |
Net cash used in investment activities | (17,229) | (27,354) | (4,650) | (8,190) |
Cash flows from financing activities | ||||
Repayment of long-term credit | (11,732) | (16,450) | (244) | (4,009) |
Short term credit from banking institutions, net | 299 | - | (1,187) | - |
Dividend paid | (11,561) | (11,465) | (2,943) | (2,844) |
Dividend paid to non-controlling interests | (3,327) | - | - | - |
Acquisition of company shares | (6,613) | (8,445) | - | (2,999) |
Net cash used in financing activities | (32,934) | (36,360) | (4,374) | (9,852) |
Effect of exchange rate changes on cash and cash equivalents | (1,471) | (3,860) | 800 | (90) |
Net change in cash and cash equivalents | 25,584 | (22,456) | 13,555 | (2,218) |
Balance of cash and cash equivalents at beginning of period | 27,850 | 50,306 | 39,879 | 30,068 |
Balance of cash and cash equivalents at end of period | 53,434 | 27,850 | 53,434 | 27,850 |
Supplementary information on financing and investing activities not involving cash flows: | ||||
View original content:https://www.prnewswire.com/news-releases/ituran-presents-fourth-quarter--full-year-2023-results-302075719.html
SOURCE Ituran Location and Control Ltd.
FAQ
What is the new dividend policy announced by Ituran (NASDAQ: ITRN)?
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