I-Tech AB (publ) Interim report Q3 2022

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I-Tech AB (publ) (ticker: ITECH) publish the interim report for the third quarter 2022

Click here on the 21 October 2022 at 10:30 to follow the webcast

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Summary of the period
” Strong growth with Asia as the driving force ”

•    Net sales for the period amounted to 21,277 (13,811) kSEK, which corresponds to a sales increase of 54 (16)%. Operating profit amounted to 4,802 (837) kSEK.

July to September 2022
•    No important events occurred during the period.

Important events after the period
•    No important events occurred after the period.

Financial Summary

All amounts in TSEK 2022Jul‐Sep 2021Jul‐Sep 2022Jan‐Sep 2021Jan‐Sep 2021Jan‐Dec
Net sales 21 277 13 811 53 409 41 088 52 901
Operating result 4 802 837 6 604 ‐2 297 ‐4 683
EBITDA 6 755 2 815 12 393 3 636 3 234
Net result 4 219 925 6 261 ‐1 041 ‐2 648
Operating cash flow 9 476 956 15 833 ‐6 957 ‐1 698
Equity at end of period 111 678 106 545 111 678 106 545 104 938
Cash and cash equivalents at end of period 48 555 30 282 48 555 30 282 35 009

CEO Comments
The third quarter sets a new high for revenue and earnings for a single quarter. The growth in the quarter stems above all from an increased demand in the wake of the multitude of product launches that took place during the pandemic. I note that our largest customer is now increasing demand in a way that is more comparable to the time prior to the pandemic, this being about a year after a series of product launches for the Asian market. The inventory problems that we have previously seen therefore appears to be in balance as far as the key markets are concerned.

The growth of our largest customer compensates for a quarterly slowdown from some of our other leading customers, and overall, we note a turnover of SEK 21.3 (13.8) million, an increase of 54 (16) %. The operating profit after tax amounted to SEK 4.8 (0,8) million. The cash flow amounted to SEK 7.7 (-3.2) million. The EBITDA margin amounted to 32% (20%), a sign of the strength in the business model, which is expected to deliver high operating returns in increasing volume, all else stays the same.

Currently we note a favourable currency position on the revenue side as we are exposed to the US dollar, both in terms of production and sales of Selektope. Adjusted for currency effects, we note a strong organic growth of 26%.

Unlike the previous quarter, which had a broader customer mix, we assess that the majority of the growth during this period is derived from a balanced increase in both Asian maintenance market as well as newbuilding market. Asia completely dominates the shipbuilding industry for both newbuilding and maintenance and recent product launches, mainly from our largest customer, are providing use in both segments.

The recent upswing for Selektope-containing products on the largest markets is vital and I confidently look forward to follow how the markets develop as other customers starts to expand the range of use of their products.

At the same time, there is a potential in Europe that has not yet been realised. This derives from a vast backlog of administrative work from authorities, as a consequence of new legislation in 2012 regarding, among other things, biocide-containing antifouling products. Products containing approved biocides that were not on the market before 2006 are still waiting to reach the decision- makers’ table. The backlog is also affirmed by the deadline for re-registration of Selektope, that together with a handful of other substances within various industries being brought forward two and a half years to mid- 2025. Although, in many aspects it is positive with stringent legislation, there is a lack of resources within authorities who can provide the necessary support to commercial entities.

While the road towards the EU and US markets requires a large portion of endurance, we are pleased about the more stable and favourable conditions, particularly in Asia, where all markets show high occupancy in both newbuilding and maintenance.

Previously, it has been very welcoming news to witness the integration of Selektope as a building block in multiple product launches. As growth now picks up for the second quarter in a row, confidence is increasing that pre-launch tests have shown good results and are now driving demand in the pursuit of a more efficient shipping industry with lower carbon footprint.

Philip Chaabane, CEO

M: +46 73 910 37 08
E: philip.chaabane@i-tech.se

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.

This disclosure contains information that I-Tech is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 21-10-2022 08:50 CET.


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