I-Tech AB (publ) (ticker: ITECH) publish the interim report for the third quarter 2020
Summary of the period
” Strong underlying business but temporarily weaker growth due to the impact of the pandemic"
Net turnover for the period amounted to kSEK 11 956 (12 238), corresponding to a decrease in turnover of -2%. Operating profit/loss amounted to kSEK -723 (-763).
Net sales for the first nine months of the year amounted to kSEK 41 631 (30 990), corresponding to an increase in sales of 34% (71%). Operating result for the same period amounted to kSEK 1 660 (-6 104).
Important events during the quarter July to September 2020
I-Tech announced that deliveries for the order to Chugoku Marine Paints communicated by I-Tech in August last year, have been partly delayed due to the current pandemic.
The ongoing pandemic continues to create uncertainty in the market, which has led to a reduced willingness to invest and increased caution during the quarter.
Important events after the period
No important events have occurred after the period.
|All amounts in TSEK||2020Jul-Sep||2019Jul-Sep||2020Jan-Sep||2019Jan-Sep||2019Jan-Dec|
|Net sales||11 956||12 238||41 631||30 990||45 574|
|Operating result||-723||-763||-1 660||-6 104||-7 019|
|EBITDA||1 269||1 298||4 318||75||1 220|
|Net result||-791||-411||-1 687||-5 926||8 427|
|Operating cash flow||5 822||320||7 173||-4 100||-4 763|
|Equity at end of period||109 721||97 055||109 721||97 055||111 408|
|Cash and cash equivalents at end of period||43 359||39 965||43 359||39 965||38 940|
Our underlying business continues to develop well, driven primarily by the maintenance market. At the same time, known external factors are having a negative effect on sales growth. After almost seven quarters in a row with steadily higher growth compared with the previous year, we see a slowdown driven primarily by the pandemic and the increased restraint and caution that it has led to at all levels. The increased caution is logical in light of the fact that freight volumes in shipping have decreased by about 4-5% so far this year. For I-Tech, this has meant that some forecasted volumes have been postponed to the first half of 2021, as previously communicated.
Sales for the quarter amounted to SEK 12.0 (12.2) million, a decrease of 2% compared with the corresponding quarter last year. The customer mix, together with the ability to transfer increased cost for logistics, has contributed to an increased gross margin at 51 (48)%.Despite the pandemic and the subsequent slowdown in the world economy, sales increased during the first nine months of the year by 34% to SEK 41.6 (31.0) million. The increase reflects the underlying long-term need for new technology that shipping has in light of upcoming tough emissions targets. The International Maritime Organization (IMO) has set a goal of reducing carbon dioxide emissions by 50 percent by 2050, with the ambition of reducing them by 40 percent by 2030. Effective anti-fouling products will be one of several key components needed to achieve these goals.
Although macro trends undoubtedly persist, the industry is in a wait-and-see mode. Most customers and end users report strong sales figures, while at the same time, due to the uncertainty, they are still taking precautionary measures in case the situation worsens. A clear proof of this nervousness is the development in the new construction market where demand has fallen sharply. However, more and more forecasts indicate that the turnaround is in sight for several vessel segments, and the proportion of stationary vessels, for example, has decreased since the previous quarter.
To sum up the first 9 months of the year, I note that despite the prevailing circumstances we have a nicely growing business, we are managing to generate a strong positive cash flow and we have continued good liquidity. I also see that our product continues to strengthen our customers’ offering and competitiveness thanks to its high performance and its positive contribution to more sustainable shipping. This provides encouragement as we wait for the business conditions to improve as the effects of the pandemic subside
Philip Chaabane, CEO
M: +46 73 910 37 08
This information is information that I-Tech AB 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 above, at 08:00 CET on October 23, 2020.
About I-Tech AB
I-Tech is a biotechnology company that has developed the product Selektope®, an active agent that prevents barnacle attachment on submerged surfaces such as ships and boat hulls, but also other marine installations. By increasing the resistance to barnacle growth in marine paint systems (e.g. antifouling coatings), fuel and maintenance costs are reduced. I-Tech has obtained the necessary regulatory approvals for Selektope® and has several of the world's largest manufacturers of marine antifouling coatings as customers. The company's share is listed for trading on Nasdaq First North Growth Market in Stockholm with Erik Penser Bank as Certified Adviser, phone: +46 (0)8 463 83 00, email: firstname.lastname@example.org. For more information visit our website www.i-tech.se.
Selektope® introduces, for the first time, a pharmacological mode of action to combat barnacle settlement. By temporarily stimulating the octopamine receptor, the barnacle larvae’s swimming behavior is activated and the organisms are deterred from the hull. These ground-breaking discoveries enable unrivalled power at very low concentrations, yet within the limits of rigorous risk assessments. Selektope® is an organic, non-metal compound with efficacy proven at 0.1% w/w. For more information visit our website www.selektope.com