July–September 2024
- Revenue totaled 95 MSEK (73)
- Operating loss totaled -23 MSEK (-29)
- Loss after tax totaled -32 MSEK (-30)
- Earnings per share totaled -0.29 SEK (-0.54)
- Cash flow for the quarter totaled -42 MSEK (-55)
January–September 2024
- Revenue totaled 227 MSEK (199)
- Operating loss totaled -64 MSEK (-81)
- Adjusted operating loss totaled -64 MSEK (-92)
- Loss after tax totaled -91 MSEK (-72)
- Earnings per share totaled -0.81 SEK (-1.36)
- Cash flow for the quarter totaled -161 MSEK (-222)
Significant events during the quarter
- On July 5, 2024, Ovzon 3 entered into commercial service, delivering Ovzon Pegasus SATCOM-as-a-Service to the French government organization GIGN
- First major Ovzon 3 order from U.S. DOD of 6.2 MUSD
- Initial limited Ovzon 3 order from Swedish Space Corporation
- Additional order on mobile satellite terminals, Ovzon T7 included, from the U.S. DOD totaling 0.7 MUSD
- Renewal from Swedish Space Corporation of 115 MSEK
Significant events after the end of the quarter
- Cooperation with FMV for demonstration on Unmanned Ground Vehicle (UGV)
- Ovzon receives extended order from Swedish Space Corporation. The new total order value of 132 MSEK will be paid in full during 2024
- Increased estimated lifespan for Ovzon 3 to 18 years
Commercialization of Ovzon 3 and strengthened order book
The continued development of Ovzon during and after the third quarter implies a commercial breakthrough. Our order intake has accelerated since our first own propertiery sattelite Ovzon 3 entered into commerical service during the summer of 2024. Our order book has clearly improved during the last quarter, providing improved financial predictability. Given this, the companys growth rate, profitability and cash flow is expected to strengthen in the coming year. Additionally, we have reduced risk for the business through a launched, proven and commercially established technology platform in Ovzon 3. Above all, we have a more diversified customer base who benefits from our advanced satellite communication solutions with leading performance, mobility and resiliency to support their critical missions.
On July 5, our first proprietary developed satellite Ovzon 3 entered commercial service, allowing us to actively continue and intensify dialogues with our current and potential customers about the new unique SATCOM-services we launched in the spring.
In August, we received the first major order from the U.S. Department of Defense (U.S. DOD), our longest tenured and historically largest customer. The agreement entails that U.S. DOD will transition from Ovzon SATCOM-as-a-service based on leased satellite capacity to now utilizing the powerful Ovzon 3. The order is for twelve months with an order value of 6.2 MUSD (65 MSEK). This extends the agreement signed in December 2023. During the quarter, we also received additional orders from this key customer for our mobile satellite terminals Ovzon T6 and our revolutionary terminal Ovzon T7.
Expansion of customer base and stronger presence in Europe
What has truly delivered results over the past few months are the long-term and focused efforts we have made to broaden our business, primarily in Europe. In September, we received another order from our partner Swedish Space Corporation (SSC) for 12 months with an order value of 115 MSEK. This is an extension of the agreement signed in December 2023. The initial order included terminals. This extension was only for Ovzon SATCOM-as-a-Service. After the end of the quarter, we received a further expansion of this order, to now also include On-The-Move mobile satellite terminals. The new total order value amounts to 132 MSEK, which will be paid in full before the end of 2024. This strengthens our liquidity and flexibility.
We have also initiated a collabora-tion with The Swedish Defence Materiel Administration (FMV) and received an order for a demonstration of an inte-grated solution based on Ovzon 3 to carry out a unique implementation of a SATCOM solution for Unmanned Ground Vehicle (UGV). The demonstra-tion will take place during the second half of November in Sweden.
The 12–month rolling order intake at the end of the quarter amounted to 474 MSEK, and the order book at the end of the quarter amounted to 222 MSEK.
Gradual improvement in profit
Revenues during the third quarter continued to increase, both compared to the second quarter and the corresponding quarter of the previous year. The EBITDA result improved, and we are pleased to report a positive EBITDA result for the quarter of 12 (-22) MSEK. This is a result of higher revenues, solid cost control, and full utilization of leased satellite capacity. The operating result (EBIT) improved by 6 MSEK, despite increased depreciation due to the commissioning of Ovzon 3.
It is also positive that the estimated lifespan of Ovzon 3 has been extended from 15 to 18 years after updated data analysis from the manufacturer. This will improve the return on investment with a reduced depreciation of 20 MSEK an-nually.
We continuously perform analyses and forecasts for the Ovzon Group’s financial strength and liquidity based on expected business outcomes and cash flows. Thanks to our solid business position and comprehensive customer dialogues, management and the board of directors’ assessment is that we have sufficient financing to sustain the com-pany’s growth and operational capacity.
2024 a breakthrough year for Ovzon
During 2024, we have achieved many important milestones and yet, the year is not over. We have created a very strong commercial position. Our focus remains on delivering and supporting our customers with vital satellite communication in connection with their critical missions. Sales to governmental organizations with rigorous procurement and evaluation processes are both complex and time-consuming.
With Ovzon 3 commercially availa-ble, we have intensified and continued our focus on in-depth meetings with customers in our prioritized markets. This has already provided results with some new customers, more businesses, and larger contracts.
With Ovzon 3 in operation, we will be able to deliver an integrated satellite communications systems with a mix of our own and leased satellite capacity. This creates flexibility in terms of geo-graphic coverage, high performance, resiliency and cost effectiveness. Above all, it provides opportunities to grow faster, scale the company and increase profitability.
The geopolitical tensions in the world along with the increased number of natural disasters, have made satellite communication a critical part of every nation’s comprehensive strategy for securing a more resilient and autono-mous communication infrastructure.
Over the past few months, we have demonstrated that Ovzon’s solutions are well-positioned to meet the needs for performance, mobility, and resiliency required in today’s challenging commu-nication environment. The order intake from the latest quarter provides new customer references for future sales efforts. This sets a positive outlook for 2025.
Per Norén, CEO Ovzon
Webcast
In conjunction with this interim report, a webcast will be conducted at 2:00 pm CET on November 15, 2024.
Ovzon’s CEO Per Norén and Interim CFO Viktor Bremer will present the results and answer questions.
The webcast can be reached via the following link: https://www.finwire.tv/webcast/ovzon/q3-2024/
For further information, please contact:
Per Norén, CEO, pno@ovzon.com, +1 206 931 7232
Viktor Bremer, Interim CFO, vbr@ovzon.com, +46 730 78 06 87
