INTERIM REPORT JULY – SEPTEMBER 2017
Third quarter of 2017 (July to September):
- Net Turnover of SEK 2.4 million (SEK 5.3 million)
- Operating Loss/EBIT of SEK -12.7 million (SEK-10.4 million)
- Result for the period of SEK -14.6 million (SEK-11.3 million)
- Cashflow for the period SEK 2.2 million (SEK -2.7 million)
- Earnings per share amounted to SEK -0.74 (SEK -1.02)
- Production of OXE units: 7 (18)
First nine months of 2017:
- Net Turnover of SEK 15.4 million (SEK 5.4 million)
- Operating Loss/EBIT of SEK -31.8 million (SEK -13.2 million)
- Result for the period of SEK-36.3 million (SEK -16.1 million)
- Cashflow for the period SEK 34.6 million (SEK 1.5 million)
- Earnings per share amounted to SEK -2.16 (SEK -1.45)
- Production of OXE units: 55 (18)
Significant events in the third quarter:
- Entered mutually favourable patent agreement with Seven Marine and Volvo Penta.
- Production delayed due to technical quality issues specifically with the turbocharger leaking exhaust gasses through a seal under specific conditions.
- The company will not meet the previously communicated sales target of 500 OXE units during 2017. Consequently, the turnover target of 150 MSEK and the positive cash flow target for 2017 will also not be met.
- New patent application approved by the US patent and trademark office
- Directed share issue, raising capital of 65MSEK was completed on 20th September 2017. Part of this was used to repay short term debt of 20MSEK.
Significant event after the reporting period
- Status update on production. The company is now unable to meet its target production run rate of 25 units per week in 2017. Various countermeasure solutions currently being validated. Its targets for fiscal year 2018 and long-term targets remain intact.
Comments by the CEO, Cecilia Anderberg:
I have been meeting distributors and customers at exhibitions as well as demo trials run by our distributors over the last few months. The great belief and expectations of our product was beyond my expectation. It was therefore painful that we have been unable to ship engines - but by meeting our end customers, it has made me more committed to ensure we ship quality products. In the short term, it is frustrating not being able to sell our engine 200hp OXE but it is the right to do so when considering the long-term expectation of our product. We do not want to take the risk sending out products not meeting our customers’ expectations.
During the third quarter of 2017, the company only delivered 7 units (previous quarter - 23 units). This was due initially to delays in the supply chain via funding shortfall prior to the IPO and the holiday season in July which affected sourcing of materials from suppliers. Subsequently in August, the company had quality assurance issues, in particular with its turbo, and as a result, we stopped deliveries to customers. The company identified and reported that the turbocharger on the 200hp model was leaking exhaust gasses through a seal under severe conditions by some demanding commercial users. The root cause has been identified and counter measures are currently being tested with a solution likely to materialise shortly.
To recommence production as soon as possible, the company will bring forward the introduction of its 150hp OXE unit. The non-deliveries are unfortunately affecting our goal of reaching at least 25 units per week during 2017. Nonetheless, our 2018 fiscal targets and long-term targets remain intact.
Whilst the demand for our product continues to exceed our production capabilities, we have nevertheless secured a German distributor (Bukh Bremen) which we believe will assist in repowering existing ageing gasoline outboards and converting smaller inboards in the German market.
BMW and Cimco are considering the possibility of fast tracking the marinization development of the of their 6-cylinder diesel engines. This will would allow Cimco to offer products with the power of more than 200hp.
Whilst we are disappointed with the short-term setbacks, I strongly believe that we have the right skills, experience and ambition to meet our long term stated targets.
For the complete Q3 Interim report:
http://www.oxe-diesel.com/category/financial-report/ or please see pdf attached.
For further information, please contact:
Cecilia Anderberg, CEO Cimco Marine AB, +46 763-10 22 50, firstname.lastname@example.org
Andreas Blomdahl, Chairman of the Board of Cimco Marine AB, +46 706-28 01 30, email@example.com
Myron Mahendra, CFO Cimco Marine AB, +46 763-47 59 82, firstname.lastname@example.org
Lars Sjögrell, Head of Public Relations, Cimco Marine AB, +46 702 69 53 00, email@example.com
Västra Hamnen Corporate Finance AB is Certified Adviser for Cimco Marine AB.
Cimco Marine AB (publ) is obligated to make this information public pursuant to the EU Market Abuse Regulation. The information was provided by the contacts above to be submitted for publication on November 30th 2017, 08:00 CET.