Renewed customer trust
July–september 2019 QUARTER
- Revenue amounted to 56,979 TSEK (51,676).
- Operating profit totalled 2,142 TSEK (2,950).
- Profit after tax amounted to 26,259 TSEK (379).
- Earnings per share amounted to 0.78 SEK (0.05).
January–september 2019 period
- Revenue amounted to 166,327 TSEK (155,079).
- Operating profit totalled -2,247 TSEK (-20,639).
- Operating profit excluding items affecting comparability amounted to 10,050 TSEK (5,421).
- Profit after tax amounted to 34,677 TSEK (-29,612).
- Earnings per share amounted to 1.13 SEK (-4.42).
SIGNIFICANT EVENTS DURING THE third Quarter
- The financing of Ovzon 3 was secured through a loan facility led by Proventus Capital Partners consisting of a loan of USD 60 million and a subordinated loan of SEK 200 million.
- Ovzon secured renewed contracts, valued at a total of USD 13.7 million, from the US Department of Defense (US DoD), through US service provider Intelsat General Corporation, IGC.
|Adjusted operating profit/loss*||2,142||2,950||10,050||5,421||8,524|
|Adjusted operating margin*||4%||6%||6%||3%||4%|
|Profit/loss for the period after tax||26,259||379||34,677||-29,612||-25,640|
|Earnings per share, SEK||0.78||0.05||1.13||-4.42||-3.63|
*Excluding items affecting comparability
“ The company has started the project of high-performance Ovzon 3, our first own satellite, to be launched in 2021″
Renewed customer trust
The third quarter has contained a number of exciting activities that further advance Ovzon’s position. We have completed the financing of Ovzon 3 – our first own satellite – and were thus able to start the production of the satellite. We have also secured renewed contracts with the US defense, our largest customer. In addition, our partner Intelsat successfully launched its IS-39 satellite, which gives us the opportunity for increased supply and revenue capacity when it is operational.
Production start of ovzon 3
In early July, we completed the financing of our first own satellite, Ovzon 3, through a loan arrangement led by Proventus Capital Partners. The loan arrangement consists of a senior loan facility of USD 60 million and a subordinated loan of SEK 200 million. With financing in place, our supplier Maxar has started production of Ovzon 3. Ovzon 3 is a central project and our primary focus in the coming years. As previously communicated, we plan to launch the satellite in 2021. Ovzon 3 is the first of a number of planned satellites to reach global coverage for our service with own satellites.
Renewed agreements with our major customer
During the quarter, we renewed our contracts with the US Department of Defense (US DoD), through the US service provider Intelsat General Corporation, IGC. The contract value amounted to a total of USD 13.7 million and refers to the first 6 months of the financial year 2020. The contract length follows the customer’s budget process and is expected to be further extended. The renewed contracts mean that we are now entering our seventh year of this service for the US DoD – invaluable evidence that our customers are very satisfied with our high-performing service.
The middle stage – growth through new leased capacity
Even before our own satellite Ovzon 3 is operational, we will provide expanded supply and revenue opportunities by leasing capacity. During the second quarter, Ovzon signed a multi-year agreement with Intelsat for capacity on the new satellite IS-39. The launch of IS-39 in August was successful and attracted a great deal of attention in our industry and Ovzon’s commitment, technology and customer base were highlighted. The initial test runs performed show that we will achieve the high data rates we expect. However, it takes time before IS-39 is fully technically and regulatory verified and the date for when we can start to use the capacity has not yet been set. The agreement with Intelsat enables Ovzon to offer supplementary coverage in Africa, Europe, the Middle East and Asia. Through the agreement with Hispasat, also signed during the second quarter, we can also offer coverage of Latin America and thus reach almost global coverage. We expect this will generate more business in the US, Europe and Latin America.
GREAT future opportunities
Sales for the year, and initially in 2020, are expected to remain relatively constant until the utilization of our leased capacity increases through the customer agreements we can sign in the future. We have managed to reach important milestones in a short time and the production of our own satellite Ovzon 3 is going according to plan. Ovzon 3 is just the start of our journey to revolutionize the market for satellite-based mobile broadband. With verified technology, the highest bandwidth, the smallest terminals and eventually additional own satellites, the possibilities are great.
Magnus René, CEO Ovzon
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 15, 2019.
For additional information please contact
Magnus René, CEO, email@example.com, +1 781 266 6957
Johan Brandt, CFO, firstname.lastname@example.org, +46 70 369 33 00