INTERIM REPORT FOR 1 JULY – 30 SEPTEMBER 2018
INTERIM REPORT JULY – SEPTEMBER 2018
Third quarter of 2018 (July to September)
- Net Turnover of SEK 3.8 million (SEK 2.4 million)
- Operating Loss/EBIT of SEK -17 million (SEK-12.7 million)
- Result for the period of SEK -22.9 million (SEK-14.6 million)
- Cashflow for the period SEK 7.1 million (SEK 2.2 million)
- Earnings per share amounted to SEK -0.87 (SEK -0.74)
- Production of OXE units: 85 (7)
First nine months of 2018
- Net Turnover of SEK 31.5 million (SEK 15.4 million)
- Operating Loss/EBIT of SEK -59.8 million (SEK -31.8 million)
- Result for the period of SEK-77.7 million (SEK -36.3 million)
- Cashflow for the period SEK 34.3 million (SEK 34.6 million)
- Earnings per share amounted to SEK -3.06 (SEK -2.16)
- Production of OXE units 225 (55)
Significant event in the third quarter
- Production status – Cimco produced 42 units in the month of June and the 200hp OXE to be re-introduced at the end
- Preliminary results of Q2 2018 and announcement to raise additional funding to meet the company’s
working capital requirement.
- Cimco Marine AB (publ) resolves on a rights issue of approximately SEK 25.5 million. This issuance is 100% underwritten
by subscriptions and guarantees by Prioritet group AB and Per Lindberg.
- Corporate Bond tap issue of SEK 26 million was oversubscribed.
- Cimco Marine AB (publ) has been issued a new patent for duoprop for Europe.
- Cimco Marine’s rights issue was oversubscribed.
- Marinediesel Sweden AB enters into option agreement with Per Lindberg regarding
shares in Cimco Marine AB (publ)
Significant event after the reporting period
- Production status – Cimco produced 45 units in the month of September.
- Cimco Marine re-launches the OXE 200hp in October 2018
- Production status – Cimco produced 43 units in the month of October.
- Cimco Marine enters into supply and development agreement with BMW. This is in respect to the supply of
BMW’s Twin Power Turbo Inline-6-Cylinder 3 litre Diesel Engine and selected parts and components.
COMMENTS BY THE CEO
During the third quarter of 2018, the company achieved production of 85 units. We could have achieved a higher level of production but was faced with a bottleneck due to single supplier being unable to produce certain parts to the agreed volumes in time. We have worked hard and have found a solution by dual sourcing these components. I am very pleased that we will be able to implement this in December and am confident that we will achieve our stated target of 25 units a week in December.
Our sales for the 150hp for the quarter was only 4 units. This was due to the following reasons:
- Cimco’s decision to hold completed engines in stock (there were no engines in stock in the previous quarter) to meet guaranteed future sales delivery dates and to mitigate production variability;
- Switch of orders by our customers from 150hp to 200hp due to the imminent re-introduction of the 200hp (which was launched in October 2018);
- sales being processed quickly in the previous quarter, prior to the holiday season, which resulted in a lower order book going forward for the 150hp.
We are working on several sales projects which could yield significant orders for the 150hp in the near future. Nonetheless our key focus now is to get the production of 200hp OXE up and running. To this end, we are slowing down our production of the 150hp in November with the aim of producing 200hp engines in December. This will also yield improved profitability and cashflow, following the price increases of our products effective from 1st November 2018.
Cimco has also increased its sales and marketing efforts – particularly in employing more personnel and increasing its media exposure. The recent METs exhibition in Amsterdam (13-15 November) was the first time Cimco had established its own exhibition stand – this proved to be highly successful. Most of our Distributor network attended the show and were pleased to see the broad range of products being offered – especially the launch of our 125hp OXE and 175hp OXE as well as the new OXE Kreta superyacht tender boat engine. At the exhibition, OXE 150hp was nominated by the Jury for the DAME Design award in the category Machinery, propulsion, mechanical and electrical systems and fitting.
During the third quarter, we produced 85 engines of which we sold 4 units whilst 6 units were provided as incentives with existing/new customers, 13 were for internal use, for both testing and for marketing purposes and 2 under warranty.
We are accelerating our cost down program on the OXE parts with a priority on achieving profitability for 2019. To this end we have employed a dedicated team to source parts and material, some of which have already been worked on and should come on line in early 2019 – and together with our product price increases, it should bring the company to achieve positive gross margins.
After years of development and testing of parts separately and in controlled DYNO environment, the OXE 300 has this month been tested on water for the first time. I am very pleased that it is ahead of schedule regarding testing and that so far, all testing has been successful. This is a great achievement by Cimco but specifically for our agile research and development team. The prototype series will undergo an extensive test programme to ensure that the product delivers on our customers’ expectations, as previously been communicated the goal is to launch the OXE 300 in April 2020.
We also signed the supply and development agreement with BMW this month. They will supply their twin turbo Inline-6-Cylinder Diesel Engine and selected parts and components. The initial order of about 900 BMW engines for 2020 will be followed by volume purchase of 2,000 engines in 2021 and 3080 engines in 2022. The planned start for production of the OXE Diesel outboards based on the BMW engine will be in April 2020. The engine will be used in four product variants: The OXE 225hp, OXE 250hp, OXE 275hp and Cimco’s new flagship variant, the OXE 300hp.
I am pleased with the way we have progressed since my appointment as CEO in June and am very confident of our future. There is much to achieve, and we remain continually focused in meeting our standards of producing an engine of the highest quality and to be synonymous with reliability, strength and endurance.
For the complete Q3 Interim report:
Please see pdf attached.
For further information, please contact:
Andreas Blomdahl, CEO Cimco Marine AB, firstname.lastname@example.org, +46 431 44 98 99
Anders Berg, Chairman of the Board of Cimco Marine AB, +46 70-358 91 55, email@example.com
Myron Mahendra, CFO Cimco Marine AB, +46 763-47 59 82, firstname.lastname@example.org
Lars Sjögrell, Head of Public Relations, Cimco Marine AB, +46 702 69 53 00, email@example.com
Västra Hamnen Corporate Finance AB is Certified Adviser for Cimco Marine AB.
Cimco Marine AB (publ) is obligated to make this information public pursuant to the EU Market Abuse Regulation. The information was provided by the contacts above to be submitted for publication on November 29th 2018, 07:30 CET.
Cimco Marine AB (publ) has, after several years of development, constructed the OXE Diesel, the world´s first diesel outboard engine in the high-power segment. OXE Diesel has a unique belt driven propulsion system that allows a hydraulic multi-friction gearbox to be mounted. This means that the engine can handle significantly higher loads than a traditional outboard engine. Cimco´s OXE diesel has a horizontally mounted engine as opposed to a traditional outboard with a vertically mounted engine.