AVTECH Sweden AB (publ) INTERIM REPORT January - June 2018
- AVTECH Group's turnover for the second quarter of 2018 amounted to MSEK 3.3 (2.4).
- Operating profit before depreciation for the second quarter of 2018 was MSEK 0.2 (-1.1) and for the six-month period MSEK 0.4 (0.5). Net profit for the second quarter of 2018 amounted to MSEK -0.9 (-1.1) and for the six-month period -1.8 (-2.4) or SEK -0.03 (-0.03) per share.
- Cash flow from operating activities for the second quarter of 2018 amounted to MSEK -0.2 (-0.1) and for the six-month period -0.5 (-2.8). The Group's cash and cash equivalents at the end of the period amounted to MSEK 17.4 (at the previous year's change 20.4). Increased market efforts of approximately 1.3 MSEK and continued supplementary product development of approximately 1.9 MSEK have affected liquidity during the six-month period.
- Equity at the end of the period amounted to MSEK 28.2 (at the previous year's end 30.0) or SEK 0.50 (0.53) per share. The Group's equity ratio was 96.5 percent (95.9).
- The increased marketing efforts have involved participation in the fairs; "The 5th China Aviation NEW TECHNOLOGY Conference", "EMEA 2018 MRO & Flights Ops IT Conference in Amsterdam" and "The 2nd Connected Aircraft Conference in Dubai". A number of seminars and video conferences have also been conducted in cooperation with staff from the Met Office during this period. These activities have significantly increased the number of informed and potential customer companies. Although lead time, from insight to contract negotiation, usually is long, we look forward to a growing customer base in the coming 6-month period. The focus has been on introducing our now comprehensive product package, which means, among other things, that our customers can choose from several different supplier solutions via, data uplink or WiFi /Internet.
- During the current six-month period, a first trial version of the AVTECH proFLIGHT iOS tablet app has been tested by about 20 pilots from different airlines. The app has been received in a very positive way. With Met Office 10KM flight weighing is a world-wide base that has been combined with AVTECH's technology for processing and visualization of complex decision making. For the first time, pilots now have access to the world's best high-resolution weather, delivered in real time and presented in a user-friendly manner.
- The dialogue with airlines in the Lufthansa Group continues in a positive way. Lufthansa Mainline has indicated a high workload in the IT unit responsible for technical integration of systems such as Aventus Nowcast.
- As previously announced, AVTECH has conducted an evaluation project of major parts of the current product range in cooperation with Norwegian Air Shuttle. During the period, the cooperation has evolved into a conviction that AVTECH's various products can be expected to be included in Norwegian’s future support system. Norwegian Air Shuttle has also expressed great interest in being a development customer. Contract negotiations have begun.
- As mentioned earlier, the cooperation project continues between Met Office, easyJet, and Gatwick Airport in London. Within the framework of cooperation, various solutions to improve the efficiency of the use of the airport have been discussed. The work continues with the aim of developing technical and financial models for launching a project in 2019. This is because the project partners have decided to postpone project launch. Another major operator has come to terms with a dedicated interest in AVTECH products and knowledge in operational efficiency between airports and airlines.
- During the period, it was decided to expand AVTECH's core competencies with two recruitments in the area of APP development and visualization of complex data.
Events after the end of the period
- On 16/8 2018, it was announced that AVTECH and Met Office (UK) signed a 3-year cooperation agreement. Office will deliver weather data from the unique 10KM-based "High Resolution Weather" to AVTECH's weather-related services and products. Under this new contract, AVTECH has an exclusive access to a jointly developed API interface that enables AVTECH products users to obtain the most detailed and accurate weather forecast available for commercial use. AVTECH has conducted a comprehensive study of the quality of various weather-related forecasts used in aviation. More than 50,000 flights have been included in the analyzes. It is clear that Met Office's 10KM-based weather grid, compared to the current 140K, which is standard in aviation, reduces wind and temperature errors of more than 50%.
- easyJet is expected to join the group of development customers for SIGMA weather alert systems in which BRA and Norwegian have been included in the year 2018.
- With the Met Office agreement as a starting point for the autumn's campaigns, AVTECH intends to raise awareness of the company in the aviation industry as well as increase market contacts.
To achieve these goals, three campaigns have been defined:
- AVTECH Premium - A comprehensive term on AVTECH's offer - The modern weather uplink solution. With the keywords SAFE (SIGMA turbulence alert), SAVE (Aventus Optimization) and COMFORT (the result achieved when the systems are used).
- Aventus SIGMA - 1-2 months free trial of Aventus Premium Sigma based on Met Office 10KM weather grid with turbulence alert. The target group is an airline with large 737 fleets, and planes for long distances. Within the airlines, the campaign focuses on Chief Pilots and C-level, fuel-saving specialists and specialists focusing on SAFE, SAVE & COMFORT.
- AVTECH proFlight - a 3 month free trial - aimed at professional pilots. After the test period, the pilot is offered an annual subscription. The ambition is increased exposure enabled by those pilots, to encourage large airlines to subscribe to the service.
Amongst other things:
- regular articles in the trade press to describe Aventus Premium and the Met Office 10KM weather grid and how unique it is
- banners, advertisements, inserts and, updates to AVTECH channels of social media on the basis of both article content above and partly client testimonials from existing users,
- Continued participation in fairs and additional webinars.
Media activities will take place continuously with repeated messages aimed at each target group.
For further information, please contact
Christer Fehrling, Managing Director, +46 (0) 8 544 104 80
Britt-Marie Lodenius, CFO, +46 (0) 8 544 104 80
or visit the company's website www.avtech.aero
The information in this press release is as AVTECH Sweden AB (publ ) is obliged to disclose under the EU Market Abuse Regulation and VpmL. The information was provided, through the contact of the above contact person, for publication on August 28, 2018 at 08.30 CET.