Solid order intake and important steps towards first satellite
July – September 2018 quarter
- Revenue amounted to TSEK 51,676 (48,256)
- Operating profit totalled TSEK 2,950 (7,519)
- Operating profit excluding non-recurring costs amounted to TSEK 2,950 (8,862)
- Profit after tax amounted to TSEK 379 (2,708)
- Earnings per share amounted to SEK 0.05 (0.54)
January – September 2018 period
- Revenue amounted to TSEK 155,079 (148,111)
- Operating loss totalled TSEK -20,639 (13,884)
- Operating profit excluding non-recurring costs amounted to TSEK 5,421 (27,442)
- Loss after tax amounted to TSEK -29,612 (1,345)
- Earnings per share amounted to negative SEK -4.42 (0.27)
Significant events during the period
- The company has signed contracts for a total value of MUSD 18.6 via Intelsat General Corporation.
Significant events after the period
- The company has signed a contract with SpaceX for the launch of the company’s first satellite.
- Nomination Committee for Ovzon’s AGM 2019 has been appointed.
- The Board of Directors has proposed a guaranteed rights issue of no more than MSEK 750.
- Extra General Meeting has been convened for the 21stof December 2018.
Important steps towards first satellite
Solid order intake, continued innovation and agreement with SpaceX
Ovzon’s third quarter was characterized by continued high activity. We secured several contracts, continued to invest in innovation and took important steps on our mission to launch our first satellite. We see clearly positive effects of our IPO in May – it has enabled both organizational enhancements and a higher pace in our business. With a strengthened financial position, we have also created better conditions for favorable discussions with both customers and project partners.
Continued high business activity
Within our existing service we have, in competition with the world’s largest operators, during the quarter secured several contracts with a total value of 18.6 MUSD through our distributor Intelsat General Corporation. This secures a large portion of our revenue for the coming year. The contracts are also an important proof from an reference customer that our service is unique. After the end of the period we also signed a contract with the British defense valued at MUSD 0.3, validating our offering on the European market.
In addition, several important market activities were conducted with demonstrations of our mobile broadband service for Europe’s leading defense organizations. In September, we attended a number of fairs, including the important technology and media exhibition IBC in Amsterdam, where Ovzons’ Mobile Broadband Unit (MBU) and the minimal size of our T5 terminals received a lot of attention.
Net sales and operating results
Revenues increased somewhat in the third quarter compared with the corresponding period last year, which is explained by stronger dollar exchange rate. Revenue is expected to remain relatively unchanged, with existing contracts, until we can offer our customers more capacity. The underlying profitability of our satellite service was unchanged during the quarter compared with the previous year. Our operating profit, however, decreased as a result of increased growth initiatives, primarily in innovation and a strengthened organization. So far this year, we have also had non-recurring costs as a result of the listing as well as the agreement with Eutelsat S.A to relocate a satellite to one of Ovzon’s orbital positions. The position is not linked to the current service but is a key part of Ovzon’s development towards own satellites.
Important steps towards launch of first satellite
During the quarter, we have taken important steps to execute our strategy for future growth through the launch of our own satellite. It will expand available capacity and thus increase the company’s revenue potential, improve operating margins, and provide us with further advantage in technology and performance. In October, we signed an agreement with SpaceX for the launch of Ovzon’s first satellite. The launch is scheduled, at the earliest, to Q4 2020 and will be carried by the SpaceX new launch vehicle Falcon Heavy. The next step for Ovzon is to complete the procurement for the manufacturing of the satellite. The financing process for the project is ongoing and the Board of Directors of Ovzon have, after the end of the period, proposed a guaranteed rights issue of no more than MSEK 750. The rights issue will be the foundation for the total project financing of approximately MSEK 1,500, which will also include debt financing.
Overall, during the first nine months of the year, we have taken big steps towards realizing Ovzon’s vision of offering global satellite coverage. We have the market’s most revolutionary mobile broadband service via satellite that combines high data rates with high mobility. We are now entering an interesting and intensive phase in our project of launching the first satellite, while we continue to evaluate opportunities for continued growth through leased capacity and more customers.
Per Wahlberg, CEO
Ovzon AB (publ) is the Parent Company of a Group with the objective of providing broadband satellite service through its own and leased satellite capacity to customers in various parts of the world.
To revolutionize mobile broadband via satellite by offering global coverage of the highest bandwidth through the smallest terminals.
The Group provides mobile satellite broadband services in areas without functioning infrastructure.
Ovzon’s financial target is to continue to develop and expand its current service offering in the coming years, at the same time as the company prepares the launch of its first self-developed satellite. The intention is to finance the company’s proprietary satellite through a combination of equity and borrowing.
This information is inside information that Ovzon is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, at 08.00 CET on November 30, 2018.
FNCA Sweden AB is the company’s Certified Adviser.
Chairman of the Board
Ovzon AB (publ)
SE-171 54 SOLNA
Corp. Reg. No: 559079-2650
+46 8 508 600 60