I-Tech AB (publ) Interim report Q3 2019
Mölndal, Oktober 25, 2019 - I-Tech AB (publ) (ticker ITECH) publish the interim report for the third quarter 2019
Summary of the period - Q3 2019
”A strong quarter with high growth and clear positive action for the future”
Net sales for the period amounted to kSEK 12 238 (4 993), which corresponds to an increase in sales of 145% (-10%). Operating result amounted to kSEK -763 (-4 889).
Net sales for the first nine months of the year amounted to kSEK 30 990 (18 077), which corresponds to an increase in sales of 71% (69%). Operating result for the first nine months amounted to kSEK -6 104 (-10 743).
July to September 2019
● Chugoku Marine Paints launched its eighth Selektope®-powered antifouling paint product.
● I-Tech received its largest supply order to date from Chugoku Marine Paints worth SEK 57million.
● Cambrex sold its holding (approximately 16%) in I-Tech. Länsförsäkringar, Handelsbanken and The Fourth Swedish National Pension Fund are new, large institutional investors on the list of shareholders.
Important events after the period
● No important events have occurred after the period
Financial Summary
| All amounts in TSEK | 2019 jul-sep | 2018 jul-sep | 2019 jan-sep | 2018 jan-sep | 2018 jan-dec |
| Net sales | 12 238 | 4 993 | 30 990 | 18 077 | 28 947 |
| Operating result | -763 | -4 899 | -6 104 | -10 743 | -13 625 |
| Net result | -411 | -5 108 | -5 926 | -10 743 | -13 737 |
| Operating cash flow | 320 | -2 068 | -4 100 | -11 181 | -11 945 |
| Equity at end of period | 97 055 | 105 761 | 97 055 | 105 761 | 102 981 |
| Cash and cash equivalents at end of period | 39 965 | 48 102 | 39 965 | 48 102 | 46 538 |
CEO comments
The third quarter this year provided a record order and sales that increased by 145 percent; from SEK 5.0 million in the corresponding quarter last year to SEK 12.2 million. The reason for the strong improvement is an increased level of activity among our customers. This includes increased sales to development customers who, after successful product verification, are close to launching products on the market.
The gross margin improved to a good 48 percent, driven by high sales and a widened customer base. For the second quarter in a row, we reported a positive EBITDA margin.
Summing up the third quarter, I can see that it puts us in a very promising position for what I believe will be an incredibly exciting journey ahead of us. What stands out in this quarter is a record order from our largest customer, Chugoku Marine Paints (CMP), which will bring strong growth in the coming year. In addition to CMP placing a large order, they also launched another product during the quarter, which further broadens their Selektope®-powered antifouling paint range. Another thing worth highlighting is that 20% of the quarter’s sales came from one of our development customers outside the Nordic region, a company which is one of the six largest in the world. This customer has progressively stepped up during this year and is currently conducting large- scale verification of our technology which paves the way for upcoming launch of new products.
As a consequence of high orders, good continued growth and a broader customer base, our gross margin improved slightly and increased from 44% to 48%. As in the second quarter, we have a positive EBITDA margin, confirming that we are on the right track to achieving our profitability target during 2020.
In September, a major change in ownership occurred as I-Tech’s largest owner, Cambrex, who held approximately 16% of the shares, sold its entire holding in the company. The sale was made in conjunction with Cambrex being in the process of being bought out of the New York Stock Exchange. In this context, it feels very satisfying to note that we have gained reputable institutions in the form of Länsförsäkringar, Handelsbanken and The Fourth Swedish National Pension Fund as new owners.
The third quarter represents an interesting milestone for I-Tech. In addition to CMP’s core business growing significantly, another large and dominant OEM in the coating industry has geared up by placing a series of recurring orders in a relatively short period of time.
A strong improvement in earnings, a positive EBITDA margin and new institutional owners enable us to look forward to the coming years with great confidence.
Philip Chaabane, CEO
M: +46 73 910 37 08
E: philip.chaabane@i-tech.se
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 Oktober 25, 2019
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: certifiedadviser@penser.se. For more information visit our website www.i-tech.se.
About Selektope®
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.