Good morning, ladies and gentlemen, and welcome to the MTI Wireless Edge interim results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time via the Q&A tab that's just situated on the right-hand corner of your screen. Please just simply type in your questions at any time and press Send. The company may not be in a position to answer every question it receives during the meeting itself. However, all questions will be reviewed with responses published on the Investor Meet Company platform where it is appropriate to do so. Before we begin, I would like to submit the following poll, and if you could give that your kind attention, I'm sure the company would be most grateful. I'd now like to hand you over to CEO, Moni Borovitz. Good morning, sir.
Good morning, Jake. Thank you everybody for joining the call today, in which I will cover the first half results of the company. I think we had a very solid first half for 2022, starting with revenue up 6% year-on-year. We did encountered some costs relating to the acquisition of P.S.K., one-time cost, and also depreciating the intangible assets related to this acquisition that resulted in an EBIT of $2.2 million, 1% year-on-year. Without these two costs, we were growing the profit probably in the rate of the EBITDA. The weakness of the Euro and the pounds against the US dollar losing 6% in the last quarter have caused some financial expenses.
We have about EUR 1 million and GBP 200,000 in cash as part of our cash to support the business in Europe and the buyback program in The U.K. This has caused us a high financial cost, as explained, and therefore the net profit and earnings per share were 3% below of last year. Our net cash remains strong with $5 million. I would like to remind you that during the first half of this year, we divested our Russian activity, which had about $2 million in cash against prepayments from vendors. We paid the dividend and we made the investment in P.S.K. all together about $7 million, and this is the reduction in cash that we saw.
We are pretty optimistic on our long-term model of generating cash out of the profits as we did in the past. We stay as a diverse business with three strong legs, and I'll explain what we did in each of the segments. We have a very loyal customer base. As you can see, over two-thirds of the business comes from customers that have been working with us for many years. Our global reach has changed a bit. Again, EMEA is down because of moving out of Russia. Israel is a little up as we did the acquisition in P.S.K. that is operating in Israel. Overall, I can say that about 20% of the business we do in Israel goes as indirect export, so about 40% is staying in Israel. Talking about the segments themselves.
First of all, it's good to see that all of the segments are making profit. This was not the case with the antenna in the first quarter, I want to remind you, but we said that we will return to profitability. In the water control and management segment, we had a small, modest growth in revenue. One should be reminded that this year is what we call a [sabbatical] year, according to the Jewish religion. It means that the municipalities here in Israel do not plant anything, so there is less development. This ends at September, according to the Jewish calendar year. We do see and assume that from October onwards, we will see a better revenue growth in Mottech.
In the antenna business, a slight decrease in revenue, mainly in the military segment, as we still see some remaining of a COVID-related issue, slow progress on the military side. Nevertheless, there is a big pipeline of opportunity that I will elaborate it. In the distribution and professional consulting services, again, a very nice growth, both relating to the P.S.K. acquisition and to the legacy part of the business that is doing very well. On a macro level, I think that we are positioned very well. I think that everybody now for sure understand that we need to manage water. It was the hottest July in Europe in the last 60 years.
This is just an example of an article showing what happened in each country in Europe, and there are many examples of the drought that you see here between 2012 to this July in many lakes and rivers across Europe. The defense budgets are increasing as we see a more violent area around the world, and the demand for backhaul and data capacity is just increasing and it all positions us very well. If we look deep into each of the segments, I'll start with the water control management. First of all, you can see here right on the right-hand side the irrigation control market in North America and how it is expected to grow. What's really interesting here that they are talking mainly on smart controllers, not only time-based controllers, but controllers that collect data.
It can be weather, it can be soil, it can be many other elements, and the irrigation is based on that, and that is exactly what we bring to the market. I would like to remind you that about 20% of our revenue in this segment is coming from service and maintenance agreement, mainly with municipalities. We were able, in the last six months, to sign a lot of pretty long contracts with those municipalities, varying from three to five years, with all of them with price increases, scaling up towards a year. We should start to see the benefit of that in the second half and going onwards. This will help us to mitigate the cost expenses that we have seen, and I'm sure that this will bring us a better profitability.
As announced, we went into a new project of managing over 30 fountains in one city in Israel. The project is continuing quite well, and I'm sure that this will open another niche for us going forwards. Overall, we see a very good demand in the developed areas of the world. Specifically, we had a very good, nice order from Italy that we will complete the shipments by the end of next week. We see more good pipeline of opportunities from various areas in this area of the world, so we are very much optimistic.
We launched at the beginning of this quarter, of the second quarter, the ICC Autopilot solution in collaboration with Viridix, which is giving the agriculture market the ability to take decision upon agronomic information, and it goes together very well with the smart irrigation controller market. Going into the antenna business, we had a very strong half year in our legacy fixed broadband wireless access. I still cannot tell if this was due to project being put on hold due to COVID, but we see good potentials there, and we also see good backlog for the remainder of this year. The slowness in the antenna, as I mentioned, was mainly in military, and the reason is that in military, you need to meet more face-to-face in order to conclude the orders.
Nevertheless, I can say that the potential and the pipeline of opportunities that we have is very big because we created ourselves a good brand name. We have given a lot of bids, and we now wait for them to mature, and we know that some of them are already in some kind of signature processes. You can see here the North American expected growth for military antenna application. It's a new research made last May. What's really encouraging is to see here MTI as one of the profiled companies alongside names like Cobham, L3Harris and Raytheon. We still see supply chains that have challenges. Mainly, I would say the microchips that our customer needs in order to build the radios and the shipping costs. I can say that in the last couple of months, we start to see shipping costs decrease.
In supply chain, we start to hear changes in the market. No doubt that the 5G backhaul antenna market is the biggest growth engine for the antenna business. There was a lot of activity in this market in the last six months. Although some of the shipments were pulled back because of not having enough chips for our customer, we still do have a good order, and we are positioned very well. About a month ago, two of the key players started discussion of an acquisition. It's Aviat Networks and Ceragon Networks. Both are listed on Nasdaq. As part of the discussion, not a friendly one, they show this graph showing the key players in this market, which are our potential customer.
It is very encouraging to see here again that we are working with five out of the seven key OEMs in the market. Our automatic beam steering antenna solution is progressing very well. We are already at the pilot stage with one tier one customer. We signed an agreement with a second one, and we are in discussion with several others. We are positioned very well to enjoy this market. One of our customer have shown this illustration explaining how the E-band, which is the 5G high-capacity backhaul solution, helps to operate the system. You can see here that on a sunny day on the left side, the E-band is thick and you have a lot of capacity. But on a rainy day, it loses connectivity and becomes less efficient, and therefore, you need the multi-band solution that we bring to the market.
I can tell you that we see a lot of enthusiasm about it, and just about 10 days ago, India closed the tender for its 5G auction, and now everybody is waiting for India to initiate the process of deployment. All over the world, the deployment is in a very early stage. India is gonna be huge once it matures. It is, of course, a price competitive market, but we are getting ready to participate in this as well. Going to our professional consulting and distribution division, I will start by talking about P.S.K., the newly acquired companies. As I mentioned in the announcement today, it is requiring some more working capital than we estimated at the beginning, mainly due to differences between creditors and debtors' payment terms, and we are working to mitigate it.
I can say that P.S.K. is doing very well. They closed several orders for shelters like you see in the below pictures. You can see the illustration of the inside of the shelters, showing a control room with the screens that you can see on the right-hand picture and the data collection area at the left. At the outside of the shelter, you see all the communication system to control it. This is the shelter that we just provided to a customer several weeks ago. P.S.K. is also doing maintenance and service agreements to our government. As we announced, they won a big tender that is valued at approximately $10 million if we take it to the full extension of seven years. We are very happy with the way it's performing.
Our legacy part of the distribution is continuing to do very well. We announced a strategic agreement with a key customer at the end of last year. We see the works working very smooth, and we are very happy with the progress of that as well. We remain very focused on our strategy. We want to add revenue on value-added solutions, and this is what we do. This allows us to increase prices when we hit the inflation, and help us to do so in various areas of the business in order to make sure that we can keep the margin and expand them as revenue grows, and this will be was and will be our strategy forward. We continue to search for M&A.
As you have heard me before, it's always on a better safe than sorry mode, so we will make one only when we are sure what the outcome will be. We continue to focus on generating cash and maximizing the potential for all shareholders. This is the reason that we increased the buyback program. We extended it until April 2023, so we are very happy with the way this is operating for us. Of course, we will continue with the dividend payments. To summarize, I think we had a very good first half. We had some one-time expenses and unexpected financial costs, deferred a little bit the net earnings. Overall, we performed very well.
We have a very healthy backlog and a very big pipeline of opportunities ahead of us that we bid, and we are waiting for the orders to come. We have a very good internal growth engine in each of the division, as I mentioned, and we continue to use the cash in order to search for qualified M&As, and we will continue to do that. I'd like to thank you for listening today and happy to take any question at this time.
Moni, that's great, and thank you very much indeed for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab that's situated on the top right-hand corner of your screen. Just while Moni takes a few moments to review those questions that were submitted already, I would like to remind you that recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your investor dashboard. Moni, as you can see, we have received a number of questions throughout today's presentation, so thank you to all the investors for submitting their questions. I will shortly invite you to open up that Q&A tab to respond to those questions where it's appropriate to do so. Perhaps before doing so, we did receive one pre-submitted question ahead of today's event.
If I may, I wanted to start off the Q&A session with this. Have any of the following affected your forecast for the company, availability of foreign supplies, including silicon chips, global price inflation or global recession? If so, by how much have your profit forecast been reduced?
Okay. We have not reduced the forecast. We have, of course, been affected like everybody else. In terms of the chips, it is mostly our customers in the antenna business that have been affected, and they pushed back some of the orders, mainly, I would say, in the 5G. In terms of inflation, of course, we have some rising costs like everybody else. But as I mentioned, because we focused on value-added solution to our customer, we were able to mitigate it by increasing our prices. I think that we will see most of the benefit of the increased prices in the second half onwards. So I think that overall, we are positioned quite well to address this issue. Okay. I have a question from Mark.
Can you expand on the Mottech relationship with Motorola, and how big is the addressable market for the water control and management division? First of all, we have an agreement with Motorola that we use their hardware worldwide. It is not exclusive by the agreement, but it is exclusive de facto, first of all, because we are the only one selling it for a number of years now. That our IP here is the software that manages those controllers. You cannot do anything without our software. In terms of, how big is the market, I think that in the slide that I showed, the North American market, only the North American market is over $100 million a year.
I think we are doing very small part of it at the moment, and we have a lot of work to develop in this market. Mark, another question: What is the current state of your supply chain? Are you seeing improvement, and what steps is the company taking to mitigate delays in facilitating customer order? As I mentioned, the key issue was the microchip with our customer, not with ourselves. We are ready. We are working in collaboration with the customer. We have antennas ready for them to take whenever they are ready. We are shipping quite fast.
Shipping costs have decreased, so in this area, we feel much more comfortable, and I think that we are almost coming to a time that this will not be an issue anymore. Peter is asking, as regards capital equipment, is this done on actual cost basis or a cost-plus? Just trying to understand if with inflation your margin can be squeezed things. I'm not sure I understand the question on the capital equipment, but I can say, as I mentioned, that we can push the prices up in some instances to meet the inflation cost. I think that overall, even if you see it, the first half of the year where we did not yet implement all of the price increases, the gross margin rate was not really affected.
We are fairly good with that. Matthew is asking, what visibility do you have on the order book for the second half of the year? Geographically, where are your strongest sales? We have a good visibility. It's not 100%, of course. I can say that in some of the division we have everything that we forecasted already booked. In some of them, we still do some bookings. Overall, we feel quite comfortable with where we are at. I think that we are in a position that the backlog is the strongest that we had. Geographically, as I said, we usually sell in the western part of the world and then it goes elsewhere. In the antenna business, in Mottech, we sell worldwide.
Right now we see better demand from the western part of the developed countries of the world, I would say. In the less developed we see some struggle, probably because of the macroeconomics. Overall, as I mentioned, you have on the slide the division between different geographies. Brian is asking, within the antenna operation, can you give a split between off-the-shelf and custom? Any margin difference, please, between own design and third party? It's a tricky question because in military everything is customized, I would say. Also in the commercial, because we are integrating with the radio of the customers, almost all of the solution at the end of the day are customized. I can tell you that we always keep the IP. We, in many instances, charge for customizing the solutions.
Once you customize a solution, then you have a big run rate. It can be up to several hundreds of thousands of antennas over the life of the project of the antenna. Customization is fairly easy once you did the development of the antenna. John is asking, would Mottech be relevant to growing vertical farming segment? Yes, of course. We are playing a lot in the agriculture market. The collaboration that we did with Viridix on the aggregation solution that we provide is exactly that. That is giving you a full understanding of what is going on with your irrigation solution, and then we can put it up to full management system. Peter asked, Russia situation, how tricky is this to manage?
For us it is not too tricky because we decided to move out of Russia and close our operations there in early March. Not the best economic decision, but it is good to know that you are on the right side. I can tell you that right now from what we understand, it's not completely under sanctions. There are some banks that are working. There are some commercial customer that you can work with. We are currently not working in Russia. We did have two good commercial antenna customer in Russia, so we are now just started to seek a legal opinion if they are not under any limitation to work with. Once we know it, we can resume maybe working with them. For us at the moment, Russia is not relevant.
Moni, that's great. Thank you very much indeed for addressing all of those questions that came in from investors this morning. Of course, if there are any further questions that are submitted today, we'll make these available to you immediately after the presentation has ended for you to review. Ladies and gentlemen, we'll publish all those responses where it's appropriate to do so on the Investor Meet Company platform. Moni, perhaps for redirecting those on the call to provide you their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that'd be great.
Yes. As I mentioned, I think we are in a very interesting market, always good growth potential. I think we are positioned very well. We performed quite well, and we are looking forward for seeing you again in the future.
Moni, that's great. Thank you very much indeed for updating investors today. Could I please ask investors not to close this session, as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of MTI Wireless Edge Ltd., we would like to thank you for attending today's presentation. That now concludes today's session. Good morning to you all.