Important steps towards Ovzon’s first satellite
October–December 2018 Quarter
- Revenue amounted to TSEK 52,804 (52,939).
- Operating profit totalled TSEK 3,103 (10,141).
- Operating profit excluding items affecting comparability amounted to TSEK 3,103 (13,650).
- Profit after tax amounted to TSEK 3,972 (4,755).
- Earnings per share amounted to SEK 0.47 (0.95).
January–December 2018 Full-Year
- Revenue amounted to TSEK 207,883 (201,050).
- Operating loss totalled TSEK -17,536 (24,025).
- Operating profit excluding items affecting comparability amounted to TSEK 8,524 (41,072).
- Loss after tax amounted to TSEK -25,640 (6,100).
- Earnings per share amounted to negative SEK -3.63 (1.22).
- The Board proposes to the Annual General Meeting that no dividend will be paid for 2018.
Significant events during the Quarter
- The company has signed an agreement with SpaceX for the launch of the company’s first satellite.
- The company has signed a contract with SSL for the manufacturing of the company’s first satellite.
- The company has secured a contract from Intelsat General Corporation with a value of MUSD 4.2.
- The company has secured a contract from a UK customer with a value of MUSD 0.3.
- An Extra General Meeting was held on December 21, 2018.
- The company has completed a rights issue providing the company with approx. MSEK 750 before deduction for issue costs.
Significant events after the Quarter
- The company has completed a rights issue providing the company with approx. MSEK 750 before deduction for issue costs.
CEO Statement
Important agreements in place and financially equipped for the next step
Ovzon’s fourth quarter was undoubtedly characterized by very high activity. We signed important agreements for the launch and manufacturing of our own satellite (Ovzon-3). Ovzon-3 will significantly increase the service’s performance, lead to new types of services, enable the use of even smaller terminals, expand coverage areas and increase available bandwidth.
In October, we signed an agreement with SpaceX for the launch of Ovzon-3. The launch is planned at the earliest in spring 2021.
In December, this was followed by an agreement with a supplier for the manufacturing of a geostationary satellite. We chose SSL, which is a leading supplier of innovative satellite and space system solutions. The satellite will be equipped with high-performance, controllable antennas and will include the On-Board Processor (OBP) developed by Ovzon. The satellite is expected to be completed in 2021. In the case of an optimized utilization of the satellite, we expect Ovzon-3 to generate annual revenues of up to SEK 1 billion in a few years, with better margins than the current service.
Important part of the financing closed
The total investment for the satellite (Ovzon-3) including manufacturing, launching, financing and insurance is estimated at SEK 1.5 billion. When it comes to financing, we have taken a big step. In December, we announced the decision to carry out a fully guaranteed new issue of shares with preferential rights for existing shareholders of SEK 750 million – a transaction that was completed in January 2019. The guarantee was required as the largest shareholder Overhorizon (Cyprus) Plc did not have the opportunity to subscribe the new share issue. Investors without subscription rights subscribed for a total of 9.8 percent of the share issue, corresponding to an amount of approximately SEK 74 million. We see this as a sign of continued great investor interest in our company.
The remaining part of the financing of the total investment is expected to take place through existing funds and with external loans. We will continue the process of loan financing during 2019.
Continued high business activity
Alongside the work with Ovzon-3, very interesting things have happened within our existing service during the quarter. For example, we secured another contract from the US customer Intelsat General Corporation (IGC). The contract of approximately SEK 37.5 million is an extension of the current agreement for continued use of Ovzon’s OHO-2 satellite communication service until September 2019.
In addition, we received a first order from a UK customer. This is the first order for Ovzon’s satellite communications service from a European customer. The initial order value amounts to USD 0.3 million, which runs for one year. This is an order that validates our unique offering on the European market and we expect it to be followed by more orders in the next few years.
Net sales in the fourth quarter were basically unchanged compared with the corresponding quarter last year. Revenues are expected to remain relatively constant going forward, with existing contracts, until we can offer our customers more capacity on satellites that have sufficient performance to make our service competitive and cover the areas where there is a need.
The underlying profitability of our satellite service was unchanged during the quarter compared with the previous year, while our operating profit decreased as a result of continued market and innovation initiatives and costs related to procurements of Ovzon-3.
All in all, during the full year 2018 and in early 2019, we have taken very big steps towards realizing our vision of offering global satellite coverage for Ovzon’s mobile broadband service.
Per Wahlberg, CEO
Publication
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 February 20, 2019.
FNCA Sweden AB, +46(0)8-528 00 399, info@fnca.se, is the company’s Certified Adviser.
Contact information
Per Wahlberg
CEO
pwa@ovzon.com
Lennart Hällkvist
Chairman of the Board
lha@ovzon.com
Ovzon AB (publ)
Anderstorpsvägen 10
SE-171 54 SOLNA
www.ovzon.com
Corp. Reg. No: 559079-2650
+46 8 508 600 60
