INTERIM REPORT JANUARY – MARCH 2018
First quarter of 2018 (January to March):
- Net Turnover of SEK 8.3 million (SEK 6.3 million)
- Operating Loss/EBIT of SEK -19.8 million (SEK -9 million)
- Result for the period of SEK -29.5 million (SEK -9.5 million)
- Cashflow for the period SEK 75.9 million (SEK 18.6 million)
- Earnings per share amounted to SEK -1.13 (SEK -0.55)
- Production of OXE units: 50 (27)
Significant events in the first quarter:
- 150hp OXE launched in January 2018. 150hp was well received by the market. Root cause of Turbo leakage of
the 200hp has been identified.
- New US patent issued. This covers the latest design of the transmission used in production of
the OXE Diesel engine today. Cimco now has 32 approved patents and 6 pending approval.
- Public share issue of 30MSEK and Corporate bond launch of 80MSEK. The share issue is considered necessary
to support the corporate bond launch –
the proceeds to which will be used for working capital purposes for production ramp up in 2018.
- Public share issue of 30MSEK substantially oversubscribed by 70%.
- Corporate bond issue of 80MSEK oversubscribed.
Significant event after the reporting period
- Successfully list the 80MSEK Corporate Bond on Nasdaq First North Bond Market.
First day of trading was 19th April 2018.
- Adjusts financial goals of 2018. The company will not reach the financial targets for 2018 being 2,000 engines sold
and a turnover of 600 million SEK.
The goal for 2018 is to achieve a secure production volume of 25 engines per week after the summer.
The company has adequate financial resources for the medium term to continue the production ramp up.
Cimco’s long-term plan of achieving sales of 10% of its addressable market,
equating to 7,700 engines per year, and EBITDA margin of more than 20 percent is still maintained.
The preliminary study on the 3.0 litre six-cylinder twin turbodiesel engine from BMW was positive and will result in the development of a prototype after summer. The study was done in cooperation with Semcon AB.
Comments by the CEO, Cecilia Anderberg:
We were delighted to have launched the 150hp OXE engine in mid-January 2018. During first quarter, we ramped up production gradually whilst at the same time working hard in maintaining the new extensive quality assurance program.
The new quality assurance program was launched in Q4 2017 which includes overseeing our design as well as our subcontractor’s ability to manufacture and deliver the right quality in time. During March, we experienced disruption to our production due to a combination of quality problems with certain parts as well as receiving the right material in time from sub-contractors. Whilst we made up some of our production loss in April, we assessed that certain subcontractors were unable to meet the company’s target production volumes in 2018 of 2,000+ engines and achieving a turnover of 600MSEK. As a result, Cimco decided to set a production run rate of 25 engines per week during the third quarter. Once we are consistently delivering at this stable production level, we aim to increase production further in the third and fourth quarter of 2018 and beyond.
Our customers remain supportive and have been ordering the 150hp engines. Due to variability of weekly production run-rates, we intend to hold certain engines in stock during Q2 and Q3 to ensure we can deliver our product on time to our customers.
We are currently testing our new specification of our 200hp engine and are working closely with our subcontractors to ensure a successful re-launch. Up to now we have been renting test equipment but from 1stof June we will take over the ownership of test equipment. That will give Cimco the possibility to improve test planning and procedures. It is also in line with our new quality assurance system which will provide a positive impact in the short and long term.
During the first quarter, we produced 50 engines of which, we sold 40 units, whilst 5 units were in exchange of prototypes that was purchased by some of our distributors, 2 to the US Navy as marketing/test units and 3 exchanged under warranty. During April and May (until end of last week), we produced a further 48 units. Our current production run rate is 18 units a week.
Our work with the BMW 6-cylinder 3.0 litre diesel engine is progressing according to plan and we completed a pre-study, together with Semcon AB, which was positive. The next stage is to develop a prototype after the summer break. Our aim is to commence production during 2020.
During the first quarter, we successfully raised 30MSEK of new equity as well as an 80MSEK corporate bond. Both issuances were oversubscribed. This should meet our working capital needs for 2018.
We are continually focused in meeting our standards of producing an engine of the highest quality and to be synonymous with reliability, strength and endurance. We have now the right staff and partners, with the right skills, experience and ambition to meet our long term stated targets.
In the last weeks, we have made great progress for both our existing and new products. Our systematic work, together with our partners, will provide the results in the second half of the year, as communicated.
For the complete Q1 Interim report:
http://www.oxe-diesel.com/category/financial-report/ or please see pdf attached.
For further information, please contact:
Cecilia Anderberg, CEO Cimco Marine AB, +46 763-10 22 50, cecilia.anderberg@oxe-diesel.com
Anders Berg, Chairman of the Board of Cimco Marine AB, +46 70-358 91 55, anders.berg@oxe-diesel.com
Myron Mahendra, CFO Cimco Marine AB, +46 763-47 59 82, myron.mahendra@oxe-diesel.com
Lars Sjögrell, Head of Public Relations, Cimco Marine AB, +46 702 69 53 00, lars.sjogrell@perspective.se
www.oxe-diesel.com
Certified Adviser
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 May 31st 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.
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