- Revenue and adjusted revenue totaled SEK 73 million (78).
- Operating loss and adjusted operating loss totaled SEK -29 million (-12). The operating loss has been affected by a provision for bad debt of SEK -7 million.
- Profit/loss after tax totaled SEK -30 million (2).
- Earnings per share totaled SEK -0.54 (0.04).
- Cash flow for the quarter totaled SEK -55 million (-60).
- Revenue totaled SEK 199 million (256).
Adjusted revenue totaled SEK 199 million (253).
- Operating loss totaled SEK -81 million (-38).
Adjusted operating loss totaled SEK -92 million (-38). The operating loss has been affected by a provision for bad debt of SEK -7 million.
- Profit/loss after tax totaled SEK -72 million (7).
- Earnings per share totaled SEK -1.36 (0.13).
- Cash flow for the period totaled SEK -222 million (-104).
Previously, Ovzon assessed that revenue for 2023 would be on a par with 2022. Ovzon’s assessment is now that revenue for 2023, based on the current order book, will at the lowest amount to SEK 250 million (compared with SEK 357 million for 2022). The adjustment is due to changed prospects attributable to long sales cycles for new business, and ongoing negotiations that are currently less likely to generate significant revenue before the end of 2023.
The launch of Ovzon 3 is now expected to take place as soon as December 2023.
Significant events during the quarter
- Launch of the new mobile satellite terminal Ovzon T7
- Order from the Italian Border Police for Ovzon SATCOM-as-a-Service.
- Service contract renewal from Airbus Defense and Space for continued support to the UK Government.
Significant events after the end of the quarter
- Preferential rights issue of approximately 250 MSEK was communicated on October 20, 2023
- The launch of Ovzon 3 is now expected to take place as soon as December 2023
- Ovzon to change Chairman of the Board
Approaching a historic milestone
Ovzon is heading towards an important end of 2023. During the third quarter we have worked very concentrated on the finalization and launch preparation of our own first satellite – Ovzon 3. This has resulted in an improved launch window, and we are now planning a launch as soon as December 2023. Moreover, our newly released small, lightweight yet powerful mobile satellite terminal Ovzon T7 meets and exceeds expectation and received many positive reviews in customer demonstrations. Ovzon 3, Ovzon On-Board-Processor and Ovzon T7, combined become our unique next generation Ovzon SATCOM-as-a-Service and creates a solid foundation for growth in 2024 and onwards.
Ongoing new sales initiatives and customer dialogues have during the third quarter been extensive but taken longer than anticipated compared to our previous assessment. Consequently, our outlook for 2023 is adjusted to a full-year revenue of at the lowest 250 MSEK, as orders expected late in the year will not have a major effect on revenue recognition for 2023. In order to strengthen our financial position and to be able to fully implement important preparations for the delayed launch of Ovzon 3, the board of directors has decided to pursue a share issue with preferential rights for existing shareholders of approximately 250 MSEK, guaranteed to 80 percent by our main shareholders.
Ovzon 3 – launch planned before year-end
The tests, assembly, and finalization of Ovzon 3 have progressed very well during the third quarter, a great team effort that has resulted in a planned launch as soon as December 2023. This is in the early part of our previously communicated time interval. Ovzon 3 will reach the launch site in Cape Canaveral, Florida by late November.
Important work still remains in preparations, and there are always uncertainties regarding the exact timing of satellite launches, such as the weather. We are, however, getting very close to this historic milestone for Ovzon. We will be the first ever privately funded, built and launched Swedish commercial GEO-satellite. We are proud to help further enhance Sweden’s strategic position in innovation and continue to place Swedish satellite and space technology in the forefront.
This satellite includes the Ovzon On-Board-Processor, with revolutionary technology enabling a completely new guaranteed way of secure connection. Ovzon On-Board-Processor is a powerful and sophisticated in-orbit processing platform adapted to the space environment, that delivers key features and directly connects deployed satellite terminals across multiple beams when teleports are degraded, destroyed or otherwise unavailable. This, in combination with our new mobile satellite terminal Ovzon T7, creates a powerful next generation SATCOM-as-a-Service solution that further strengthens our position in terms of performance, mobility and resiliency.
New outlook as a result of extended strategic sales pursuits
During the third quarter we received a new order from the Italian Border Police, a renewal and extension of the contract with the UK Government through our partner Airbus and new orders from Swedish Space Corporation (SSC). We are very proud of these new and renewed orders, as they are all acting within our core customer segments. They will further strengthen our position in these markets. They represent solid continuation and the start of long-term collaboration and have the potential for scale-up. It is worth noting that we haven’t lost any customers and/or procurements during the quarter, but new sales pursuits have been extensive and taken longer than anticipated compared to our assessment earlier this year.
As already mentioned above, our outlook for 2023 has consequently been changed to a full-year revenue of at the lowest 250 MSEK. The estimated lower revenue for the year compared to last year is reflected in our operating profit as well as cash flow for the quarter. We have decided to make further provisions for bad debt on the remaining receivable of 7 MSEK from our former Italian distributor, who during the quarter deviated from the agreed payment plan. After this provision for bad debt, there is no further accounting exposure against the former distributor. With this, we have also taken legal actions.
During the quarter, we have taken measures to reduce the unused satellite capacity that last year had a negative effect on the result. This will have an effect in the fourth quarter.
New share issue with preferential rights
Since our new strategic sales pursuits have taken longer than anticipated and that we have continued to invest in the finalization of our major technology programs, we consider it necessary to strengthen our financial position in preparation for the launch and operationalization of Ovzon 3. The board of directors has therefore decided to conduct a share issue with preferential rights to existing shareholders of approximately 250 MSEK, guaranteed to 80 percent by our main shareholders. This capitalization brings financial strength and flexibility coupled with enduring credibility in customer dialogues. The proceeds from the rights issue are intended to be used to finance operations for 2024 and 2025, taking into account the adjusted outlook for 2023 as well as to strengthen the company’s working capital and additional costs related to the completion and launch of Ovzon 3.
Solid platform for growth entering 2024
Even though 2023 has been a bumpy year from a sales and growth perspective, I am more convinced than ever about Ovzon’s potential. The need for guaranteed resilient connectivity is increasing in Ovzon’s core customer groups in government, defense, national security. We have established long-term relations with the most demanding customers in the US and Europe.
Entering 2024 we have, with Ovzon 3, a premium, unique and relevant SATCOM-as-a-Service solution based on advanced technologies, products and services and the capacity to deliver the best performance, mobility and resiliency to our current and future customers. We foresee a growing need for mission critical satellite communications in the coming years driven by continued geopolitical tensions and the effects of climate change. We take great pride in supporting a more stable world by protecting and connecting societies, people, businesses, and countries with mission critical satellite communications. With the upcoming launch of Ovzon 3 I am confident that Ovzon will continue to play a critical role for a safer world.
Per Norén, CEO Ovzon
In conjunction with this interim report, a webcast will be conducted at 2:00 pm CEST today October 20, 2023. Ovzon’s CEO Per Norén and CFO Noora Jayasekara will present the results and answer questions. The webcast can be reached via the following link: https://www.finwire.tv/webcast/ovzon/ovzon-q3-presentation-2023/
The presentation will be given in English, with the possibility of asking questions in Swedish.