Ovzon Interim Report, January – June 2018

April – June 2018 quarter

  • Revenue amounted to TSEK 57,092 (50,679)
  • Operating loss totalled TSEK -11,966 (7,889)
  • Operating loss excluding non-recurring costs amounted to TSEK 2,057 (10,546))
  • Loss after tax was TSEK 15,051 (2,996)
  • Earnings per share were negative SEK -2.25 (0.60)

Januari–june 2018 period

  • Revenue amounted to TSEK 103,403 (99,855)
  • Operating loss totalled TSEK -23,589 (6,365)
  • Operating loss excluding non-recurring costs amounted to TSEK 2,471 (18,560)
  • Loss after tax was TSEK -29,991 (-1,363)
  • Earnings per share were negative SEK -5.13 (-0.27)

Significant events during the period

  • On May 18, a listing of the company’s shares was completed on Nasdaq First North Premier. Through the rights issue in connection with the listing, the company raised net TSEK 173,095.
  • On June 11, Carnegie announced that they, in their role as stabilization agent, chose to use an over-allotment option. For this reason, a directed share issue was issued that raised further TSEK 48,750.
  • In connection with the listing, a new Board of Directors took office.

CEO statement

Important milestone reached

Listing, strengthened organization and innovation
successful listing and additions to the board

Ovzon’s second quarter was eventful, to say the least. On May 18 we were successfully listed on Nasdaq First North Premier, with an offer that was oversubscribed and where the associated over-allotment option was fully exercised. The new share issue in connection with the listing improved the company’s financial position significantly and allowed a final solution to the disputes mentioned in the prospectus. In connection with the entry of both Bure Equity AB and Investment AB Öresund as Anchor investors, the Board was also strengthened with competence that will contribute to Ovzon’s future growth, organizational development and financing. We have also strengthened the organization with recruitments, including Johan Brandt, who will join as new CFO in September. Johan most recently comes from a CFO position at Arcam and has broad financial and industrial experience.

High business activity

In parallel with the listing, several important activities were also carried out in the operations, including demonstrations of a number of applications for the Spanish defense and participation in a larger French defense exercise. In the area of innovation and development there has also been a high level of activity where we in June were able to showcase a first prototype of Ovzon’s “Mobile Broadband Unit” (MBU) – a proprietary, unique and completely new type of satellite terminal intended to be carried by a person in motion while communicating at high data speed. The device also has a Wi-Fi router that allows connection for others nearby. The company intends to refine the unit further to make it smaller and lighter.

A proof that our innovations are at the forefront is the 2-year grant of approximately SEK 10 million we received from the Swedish Space Agency to support our technical development. The funding is intended for the development of a ground component for Ovzon’s satellite service.

During the second quarter, Eutelsat S.A. carried out the so-called “Bring Into Use” (BIU) contracted in the first quarter. A BIU can be compared to taking a building permit in use. As with the building permit, the position must be put into service within a certain time. This meant that they moved one of their satellites to one of Ovzon’s orbital positions, which implies that the position/frequency license does not expire. The orbital position is not linked to the current service but is a central part of Ovzon’s development towards own satellites. The relocation of the satellite involved an expense of USD 1.6 million in total, half of which were charged to the first quarter and half the second quarter.

Net sales and operating profit

Net sales increased in the second quarter compared with the same period last year, which is attributable to revenue from the sale of terminals. The company’s operating profit, excluding non-recurring costs, decreased during the quarter and amounted to SEK 2.1 million (10.5), which is mainly explained by a weaker dollar and increased development costs. For the six months, adjusted operating profit amounted to SEK 2.5 million (18.6). The Group’s development costs for the first six months are close to SEK 11 million (0.9).

Group development

With the listing completed, we have the conditions to execute our strategy for future expansion and growth. Apart from currency fluctuations, revenue is expected to be relatively constant, with existing contracts until we can offer our customers more capacity. It has become increasingly clear during the period that it is important for Ovzon to present to end customers a clearer plan for the next step with its own satellite. These discussions are ongoing and will intensify in the second half of 2018, where we evaluate different options for the optimal technical and financial solution. Renegotiation of the renewal of existing contracts for the current service will also take place in the second half of the year. Overall, during the first half of the year we have taken a major step towards realizing Ovzon’s vision. We have the market’s most revolutionary mobile broadband service via satellite, that combines high bandwidth with high mobility. We continue to be at the forefront in terms of innovation and thanks to the listing, we now have a stable financial position and a strengthened organization.

Per Wahlberg, VD

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 August 30, 2018.

For further information, please contact:

Per Wahlberg, CEO
Lennart Hällkvist, Chairman
Tel: +46 8 508 600 60
E-mail: media@ovzon.com

About Ovzon

Ovzon is a provider of a satellite based mobility broadband service, targeting end-markets and users in need of high data speeds combined with mobility. Applications include real-time sensor and video upload, either from moving or highly mobile platforms, including small vehicles, small aircraft or UAVs, or transmissions directly from on-site staff holding the terminals and transmitting on-the-go.

Since its inception, Ovzon has developed a complete satellite communication service with compact and mobile terminals at its core. Ovzon’s current system is designed to provide a competitive advantage through a unique combination of several characteristics, including high mobility, high uplink and downlink data rates, small easy-to-use terminals and high link availability. Ovzon’s current service is based on leveraging leased satellite transponders from five existing communication satellites. To expand the service coverage and total available bandwidth, Ovzon aims to lease further capacity, including from satellites currently under construction and which are expected to be launched in 2019. The Company’s goal is to launch its own satellites to be able to offer an even more powerful service to its customers.

Ovzon is headquartered in Solna, Sweden and has offices in Tampa, FL and Bethesda, MD in the United States. The Group has 15 employees as well as 4 full time and 5 part-time consultants. Since May 2018 Ovzon is listed on Nasdaq First North Premier. FNCA Sweden AB is appointed as the company’s Certified Adviser.