New customers and products

Full-year January–December 2020

  • Revenue amounted to TSEK 160,477 (231,642).
  • Operating profit amounted to TSEK -48,284 (11,419).
  • Operating profit excluding non-recurring costs amounted to TSEK -48,284 (23,716).
  • Profit after tax amounted to TSEK -104,049 (29,230). The result includes currency conversions and financial transaction costs of TSEK -58,759 (25,086).
  • Earnings per share amounted to SEK -2.52 (0.93).

The quarter October-December 2020

  • Revenue amounted to TSEK 33,633 (65,315).
  • Operating profit amounted to TSEK -19,326 (13,666).
  • Operating profit excluding non-recurring costs amounted to TSEK -19,326 (13,666).
  • Profit after tax amounted to TSEK -55,683 (-5,447). The result includes currency conversions and financial transaction costs of TSEK -36,362 (-18,276).
  • Earnings per share amounted to -1.20 SEK (-0,16).

Significant events during the period

  • Introduction of Ovzon T6, a new portable satellite terminal
  • Agreement with Hellas-sat on capacity in Europe and the Middle East
  • Launch of Ovzon GO, a new service for satellite-based mobile broadband
  • First order from Airbus for a customer in the UK
  • New 12-month order of MUSD 14.6 from IGC, for US DoD
  • FHG Security appointed distributor for France
  • Order from the national fire corps in Italy

Significant events after the period

  • Ovzon certified according to ISO 9001

Outlook

  • The company estimates that turnover in 2021 will be higher than in 2020. With Ovzon 3, that will be put into operation in 2022, the company expects to increase turnover further.
Oct-Dec Oct-Dec Jan-Dec Jan-Dec
TSEK 2020 2019 2020 2019
Revenue 33 633 65 315 160 477 231 642
Operating profit/loss -19 326 13 666 -48 284 11 419
Adjusted operating profit/loss* -19 326 13 666 -48 284 23 716
Profit/loss for the period after tax -55 683 -5 447 -104 049 29 230
Earnings per share, SEK -1,20 -0,16 -2,52 0,93

*Excluding items affecting comparability. Items affecting comparability 2019 refer to the write-down of advances to Orbital. See note 5.

Comments from the CEO

Ovzon has during the year, and especially during the second half, advanced its position. During the fourth quarter, we have signed several important agreements with existing and new customers, launched new products and services and entered into new partnerships that will further strengthen our sales capacity. In addition, the production of our upcoming satellite Ovzon 3 is proceeding according to plan, with launch planned at the end of 2021 – a milestone for Ovzon.
During the year, we strengthened the organization, especially on the market side, by welcoming Tom Hopkins as COO, Dan Gager as CCO and Nils Norén as Chief Product Development and Supply. We have also expanded our satellite network through agreements with Intelsat on steerable antennas and with Hellas-sat on regional coverage. This means that we can already now offer our customers nearly global reach. We have been able to deepen the cooperation with our important customer US DoD, and at the end of the year we received an order for a full year, where capacity from a steerable antenna is included in the deal for the first time.

The investments have negatively affected the result, but at the same time we have broadened our network to global reach, added new services and products and strengthened the organization, including agents and partners, to develop our business and prepare for Ovzon 3.

New customers and quarterly outcome as expected

During the quarter, we signed agreements with two new customers. It is very satisfying to see that we are now reaching new customer groups in new geographies. The first order came through the collaboration with Airbus, which began in April 2020, and relates to a UK based end-customer. This order is for 12 months delivery and starts in February 2021. We also received yet another order through our Italian distributor Gomedia, this time for the Italian fire corps. Our business in the Italian market is developing strongly in collaboration with Gomedia. The agreement with the Italian fire corps shows the appetite for Ovzon’s mobile broadband services among civilian government customers, but also that our marketing strategy with distributors is beginning to pay off. In December we appointed FGH Security as a distributor in France.

In our report for the third quarter we guided for that sales in the fourth quarter would be in line with the outcome in the second and third quarters. This was also the case, as a result of lower revenue from the US Defense (US DoD) during the March-December period and weaker dollar exchange rates.

Our earnings are also negatively affected by the fact that we do not yet fully utilize our new leased satellite capacity. However, the development in Q4 show that we have laid a good foundation for future growth. In December, we secured a renewed contract totaling MUSD 14.6 from US DoD. The contract runs for 12 months until mid-December 2021 and gives us a solid revenue base and a good start to 2021.

New products and services

During the quarter we launched our new satellite terminal Ovzon T6. The new Ovzon T6 is the world’s smallest and lightest satellite communications terminal with measured performance of 120 Mbps received data speed and 50 Mbps transmission. Ovzon T6 has already been procured by the US DoD. Performance is in a class of its own and with our coming satellite Ovzon 3 we will be able to increase the transmission speed even further.

Furthermore, we have launched the Ovzon Go service, a packaged product that complements our customized, high-performance Ovzon Hero service. Ovzon Go offers data speeds up to 10 Mbps and targets a wider customer group, including media. In the quarter we also signed an agreement with Hellas-sat, where we get access to their satellite capacity across large parts of Europe and the Middle East. With the agreement in place we can now offer global reach for our services.

Ovzon 3 on schedule, increased leased capacity

Ovzon 3, which is now under production at our partner Maxar in the US, is planned to be launched during the fourth quarter of 2021. Final testing of functionality, assembly and quality will take place at Maxar during the second and third quarters of 2021. With Ovzon 3, our capacity will be multiplied, and the satellite makes possible services with even better performance and enhanced functionality. Ovzon 3 is the first of a number of satellites planned for global reach of our service based on our own satellites.

During the third quarter, we secured the capacity of steerable antennas on Intelsat satellites IS-39 and IS-37. This capacity is similar to the capacity that Ovzon 3 will provide when it is in service and, with the agreement, Ovzon’s current offering is strengthened with additional capacity and coverage. This is an important investment in capacity as it increases our ability to serve customers with requirements for global coverage and high bandwidth and it thus paves the way for our upcoming satellite Ovzon 3. Already in Q3, we received a confirming first order from IGC for the US DoD for one of these steerable antennas.

Gearing up for growth

The pandemic continues to be challenging and it affects our ability to meet customers, demonstrate our services and take on new business. Nevertheless, we have managed to make several deals, both with existing and new customers, confirming the strength of our offering. We have today an order backlog, including contracts for Ovzon 3, of about 70 MUSD. In the present challenging environment we do not expect all our available capacity to be sold in the first part of 2021. However, we believe that the market for satellite communications services that require high mobility and performance will develop positively and that sales in 2021 will be higher than in 2020. The company expects to continue secure new customers in 2021, that will also be interested in capacity on Ovzon 3, put into service in 2022.
With a strengthened organization, an offer with global reach and the large revenue opportunities that Ovzon 3 offers, we have great opportunities to continue strengthening our position in 2021.

Magnus René, CEO

FNCA Sweden AB, +46(0)8 528 003 99, info@fnca.se, is the company’s Certified Adviser.

This information is information that Ovzon AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014). The information in this press release has been published through the agency of the contact persons set out below, at the time stated by Ovzon AB’s (publ) news distributor Cision, upon publication of this press release.

For additional information please contact

Magnus René, CEO, mre@ovzon.com, +1 781 266 6957

Johan Brandt, CFO, jbr@ovzon.com, +46 70 369 33 00

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