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Technology / AI and automation

MAGIC BLAMES LOSSES ON SWITCH IN GOVERNMENT POLICY

Israeli rapid application development company Magic Software Enterprises Ltd is attributing its second quarter losses to one- off charges and changes to research and development grants and implemented by the Israeli government. The company reported losses for the second quarter of $4.8m, which included one-off charges of $2.7m relating to mass sales in some of its more critical markets and restructuring costs. During the period, Magic Software spent $1.7m on relocating its operations and reducing its workforce. It says the remaining $1m of charges came as an effect of a change in the accounting processes of government-sponsored research and development grants following the signing of a new agreement within the government. The company did see a very slight increase in sales for the period with revenue increasing just 0.3% to $9.1m in the quarter, but a 13.6% rise to $18.7m in the half. Magic said its revenue mix shifted in the second quarter as the percentage of software sales decreased and the percentage of revenue generated from its services business increased. The company said the shift represented its move into enterprise-wide applications and those customer requirements for technology transfer related services.

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