Interim Report, January–June 2019
Important Customer Agreements and Financing of Ovzon 3
April–June 2019 Quarter
- Revenue amounted to 55,987 TSEK (57,092).
- Operating profit totalled -9,049 TSEK (-11,966).
- Operating profit excluding items affecting comparability amounted to 3,248 TSEK (2,057).
- Profit after tax amounted to -12,915 TSEK (-15,051).
- Earnings per share amounted to -0.38 SEK (-2.25).
January–June 2019 Period
- Revenue amounted to 109,348 TSEK (103,403).
- Operating profit totalled -4,389 TSEK (-23,589).
- Operating profit excluding items affecting comparability amounted to 7,908 TSEK (2,471).
- Profit after tax amounted to 8,418 TSEK (-29,991).
- Earnings per share amounted to 0.29 SEK (-5.13).
Significant Events During the Quarter
- Agreement with Intelsat regarding future sales on the company’s coming satellite Ovzon 3 of MUSD 56 (approx. MSEK 520).
- Agreement with Intelsat regarding capacity on their new satellite, IS-39, which adds possible capacity for the customers.
- At the AGM on April 10, Anders Björkman was elected a new Director of the Board. He was also elected new Chairman of the Board.
- In early May, Magnus René was appointed new CEO. Per Wahlberg, founder and former CEO continues within the company as Executive Vice President and Head of Business Development.
- Ovzon and Hispasat, a Spanish telecommunications and satellite operator, entered into a strategic cooperation agreement regarding sales of Hispasat's satellite capacity to Ovzon's customers.
Significant events after the Quarter
- The financing of Ovzon 3 was secured through a loan facility led by Proventus Capital Partners consisting of a loan of USD 60 million and a subordinated loan of SEK 200 million.
|Revenue||55 987||57 092||109 348||103 403||207,883|
|Operating profit/loss||-9 049||-11 966||-4 389||-23 589||-17,536|
|Adjusted operating profit/loss*||3 248||2 057||7 908||2 471||8,524|
|Adjusted operating margin*||6%||4%||7%||2%||4%|
|Profit/loss for the period after tax||-12 915||-15 051||8 418||-29 991||-25,640|
|Earnings per share, SEK||-0,38||-2,25||0,29||-5,13||-3.63|
*Excluding items affecting comparability
"During the summer, we completed the financing of Ovzon 3 by securing loans of nearly SEK 800 million"
Important customer agreements and financing of Ovzon 3
During the second quarter, we continued to develop the company according to plan. The last bit of funding for Ovzon 3 is in place and Maxar, our satellite provider, has started the project to build the satellite. As for the launch of the satellite, we have recently contracted Arianespace to launch our satellite in 2021 and we have thus left the preliminary agreements we had. Arianespace is a leading launch service provider with a long track record of successful launches with Ariane 5. Arianespace recently launched Intelsat IS-39.
Important Commercial Agreements
In April, we signed two very important agreements with Intelsat, the world's largest satellite operator. The first agreement means that Intelsat undertakes to buy Ovzon's services on the planned new satellite Ovzon 3, for a total order value of USD 56 million (approximately SEK 520 million). When Ovzon 3 is in operation, this will give Intelsat the opportunity to resell Ovzon's unique mobile broadband service to its customers.
The second agreement with Intelsat means that Ovzon secures additional capacity to expand its current service. This is a multi-year agreement where Intelsat provides us with capacity and steerable antennas on its new satellite, Intelsat 39 (IS-39). The satellite, which was launched with Arianspace in August, is expected to be deployed in the third quarter of 2019. The agreement enables Ovzon to offer additional coverage in Africa, Europe, the Middle East and Asia.
Furthermore, we have signed a strategic cooperation agreement with Hispasat, a leading Spanish telecommunications and satellite operator, to jointly offer a powerful portable broadband solution supported by Ovzon's technology and the satellite fleet within Hispasat.
With the new agreements with Intelsat and Hispasat, we can offer our customers almost global coverage. We expect the new agreements will help us generate additional business in the US, Europe and Latin America.
Financing Secured for Ovzon 3
During the year, we have been working on completing the financing of our first own satellite, Ovzon 3. In January, we completed a rights issue that raised SEK 750 million before transaction costs and in early July we took the second financing step through a loan arrangement led by Proventus Capital Partners. The loan arrangement consists of a senior loan facility of USD 60 million and a subordinated loan of SEK 200 million. With financing in place, Ovzon will now act quickly for the satellite to be launched during 2021. Ovzon 3 is the first of a number of planned satellites to reach global coverage for our advanced service.
The work with financing has been extensive during the first half of the year, and the planned listing on Nasdaq Stockholm's main market, scheduled for this the autumn, thus is postponed until 2020.
The new agreements we signed with Intelsat and Hispasat gradually increase both our available capacity and our coverage. Sales for the year is expected to remain relatively constant until the use of our leased capacity increases through the customer agreements we can sign in the future. We have managed to reach important milestones in a short period of time, both commercially and financially, especially when it comes to launching our own satellite Ovzon 3. We are just at the beginning of a long and exciting journey.
Magnus René, CEO Ovzon
This information is inside information that Ovzon 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 below, at 08.00 CET on August 23, 2019.
For additional information please contact
Magnus René, CEO, firstname.lastname@example.org, +1 781 266 6957
Johan Brandt, CFO, email@example.com, +46 70 369 33 00
Ovzon is revolutionizing mobile broadband via satellite providing global coverage with the highest bandwidth through the smallest terminals. Founded in 2006, Ovzon develops end-to-end solutions meeting the growing demand of mobile broadband connectivity for customers with high performance requirements.
Ovzon’s combination of advanced proprietary satellite technology and unique ultra-small terminals answers the needs for mobile users to connect anywhere and transmit large amounts of data. Customers include Government, Defense, Media, Maritime, Aviation and NGOs using highly mobile platforms. Our dedicated and experienced team ensures a premium service for our demanding global customers.
The company has offices in Stockholm in Sweden and Bethesda (MD) and Tampa (FL) in the United States. Ovzon is publicly listed on Nasdaq First North Premier.