Interim report, January–June 2021

New orders pave the way for next step

January–June 2021

• Revenue amounted to TSEK 70,346 (94,559)
• Operating profit amounted to TSEK -61,568 (-11,958)
• Profit after tax amounted to TSEK -49,792 (-18,186). The result includes currency conversions and financial transaction costs of TSEK 11,948 (-9,147)
• Earnings per share amounted to SEK -1.08 (-0.51)

April–June 2021

• Revenue amounted to TSEK 33,216 (34,983)
• Operating profit amounted to TSEK -30,910 (-17,313)
• Profit after tax amounted to TSEK -38,538 (-51,891). The result includes currency conversions costs of TSEK -7,451 (-37,668)
• Earnings per share amounted to SEK -0.84 (-1.42)

Significant events during the period

• Listing on Nasdaq Stockholm Mid Cap on April 20, 2021
• Ovzon has utilized USD 35 million through its loan facility from Proventus
• Extended order from the Italian National Fire Corps
• Per Norén assumed the role as new CEO on May 1
• Order of USD 1.8 million from the US Department of Defense
• Order from Opcion Legal in Colombia via Bansat
• Order of USD 2 million from the US Department of Defense

Significant events after the period

• Order from the US Department of Defense on Ovzon T6 terminals for use in air operations
• Order of USD 5.9 million, corresponding to approximately MSEK 51, from the US Department of Defense
• Notice of rescheduled launch of the satellite Ovzon 3

Key figures            

New orders pave the way for next step

The first 90 days as the new CEO of Ovzon have passed very quickly. It has been intense, inspiring, and insightful to get to know such a dedicated and competent team. The experience has made me even more optimistic about our future. Over the years I have developed a very simple, yet relevant leadership philosophy that will fit nicely at Ovzon: people first – customers always – business ubiquitously.

My clear goal for the first 30 days was to meet all our stakeholders globally. It took every one of the 30 days. Each engagement was very valuable. After meeting these important and motivated stakeholders consisting of customers, employees, partners, board members and owners, it became clear to me that my leadership and focus will be to lead Ovzon to reaching its full potential as quickly as possible.

I have had the opportunity to meet with most of our customers and participate in customer engagements and demonstrations. It quickly became very apparent to me that Ovzon is a customer-centric organization; everything we do starts with our customers and ends with our customers. We have a unique competency, understanding and passion for ‘being the customer’. All our customers, in all our markets have vital needs and requirements. They fully trust our services to be able to operate in remote places across the globe with non-existent or unreliable infrastructure. They require truly global and truly mobile solutions where our Satellite-as-a-Service offering delivers a unique value. We have made a commitment to provide our customers with a solution that is best in class in terms of technology, reliability, security, mobility and performance. Ovzon’s focus will continue to grow and to deliver on our unique solutions.

Additional orders  
Additional second quarter orders totaling 3,8 million USD as well as the most recent order of USD 5.9 million from our largest customer, the U.S. DoD, offer excellent proof of the value we bring to the world’s most technically sophisticated and demanding organizations. These new orders include an expanded global footprint, Ovzon’s On-The-Move (OTM) terminals for simple integration on mobile platforms, as well as the newly launched Ovzon T6 terminal for On-The-Pause (OTP) satellite communications. The orders offer further strong confirmation of our relevance to the U.S. DoD’s global mission and is a solid indication of demand for the important Satcom-as-a-Service capacity of the upcoming launch of Ovzon’s new satellite. These orders pave the way for the next step in development and level of performance for Ovzon. The orders during the first half of 2021 from the U.S. DoD create a good foundation for a much stronger second half. The revenue for the second quarter is in line with previous year. The lower revenue during the first half of the year is a result of the, compared with Q1 2020, current lower contract sizes with the U.S. DoD, relatively speaking. It is also an effect of the pandemic as it has been more difficult to meet with customers and create solutions together. Our cost base has increased according to plan, which is a consequence of the fact that we have continued to invest in the future in the form of increased satellite capacity with higher performance - a capacity for which we did not gain full customer utilization for during the first half of the year. At the same time, we have been able to use this capacity for trials and demostrations for our next generation of products and services.

The first order from South America
I have also met with many of our partners. They play a key role in our profitable growth strategy. We will continue being selective but expand our network of partners and motivate, educate, and incentivize them on how to represent Ovzon and bring our products and services to a global market that we cannot reach in the same speed alone. In Q2, we received an order through our partner Bansat from Opcion Legal, an NGO in Colombia affiliated with the UN Refugee Agency. The service will be used in the most remote areas of Colombia for an initial contract period of six months that started in July. We won this order because large parts of Colombia are lacking broadband connectivity to the internet. This is a first and important step in establishing and expanding our services in South America. 

Ovzon 3 and future growth
Ovzon 3, which is in final production and testing with our partner Maxar was planned to be launched during Q4 2021 and operational in Q2 2022. We have worked hard to maintain our launch schedule, but as communicated in a press release on August 17, this will unfortunately not be possible. The global pandemic and industry-wide supply chain issues have forced our production partner Maxar and one of their subcontractors, Honeywell, to delay the completion of Ovzon 3. We therefore plan for a rescheduled launch at the end of the second quarter 2022, and the satellite is thus expected to be operational during the fourth quarter. We have informed our customers and they continue to be committed and motivated to take advantage of our satellite's unique strength in their global networks. The delay will not affect Ovzon's current business and deliveries to existing or new customers. We have previously, strategically, secured leased satellite capacity for Ovzon's requested Satcom-as-a-Service offering. The launch of Ovzon 3 is a daily focus for myself and our team, and we confidently look forward to the launch during 2022.

The recently announced major contract we received from our largest costumer the U.S. DoD of USD 5.9 million is another important expansion and reference order. With the launch of Ovzon 3, we will expand our offering with unprecedented capabilities for our customers. It will be a clear catalyst for market expansion and profitable growth. I am convinced that Ovzon has the potential to multiply growth as we continue our path to deliver groundbreaking, integrated and mobile Satcom-as-a-Service solutions to customers around the world. 

Per Norén, CEO, Ovzon

This information is information that Ovzon AB (publ) is obligated to make public pursuant to the EU Market Abuse Regulation 596/2014 and the Securities Markets Act (2007:528). The information in this press release has been published through the agency of the contact persons set out below, at the time stated by Ovzon AB’s (publ) news distributor Cision upon publication of this press release.

For further information please contact:

Per Norén, CEO, pno@ovzon.com , +1 206 931 7232

Johan Brandt, CFO, jbr@ovzon.com, +46 (0)703 693300

About Ovzon
Ovzon is revolutionizing mobile broadband via satellite with the highest bandwidth through the smallest terminals. Ovzon’s end-to-end solutions meet the growing demand of global connectivity for customers with high performance requirements including Government, Media, Maritime, Aviation and NGOs. The company was founded in 2006 and has offices in Stockholm in Sweden and in Herndon, VA, and Tampa, FL in the United States. Ovzon is publicly listed on Nasdaq Stockholm. For more information about Ovzon, visit www.ovzon.com.