Foundation for growth in place
Oct-Dec Oct-Dec Full-year Full-year
TSEK 2019 2018 2019 2018
Revenue 65,315 52,804 231,642 207,883
Operating 13,666 3,103 11,419 -17,536
Adjusted operating 13,666 3,103 23,716 8,524
Operating margin 21% 6% 5% neg
Adjusted operating 21% 6% 10% 4%
Profit/loss for the -5,447 3,972 29,230 -25,640
period after tax
Earnings per share, -0.16 0.47 0.93 -3.63
Comments from the CEO
A year in which we laid the foundation for strong future growth
The fourth quarter followed the same pattern as previous quarters in 2019 with a slightly increased sales and improved underlying profitability. However, the really important progress in 2019 was that we laid the foundation for further growth for the company. During the year, we completed the financing of a total of SEK 1.5 billion of our first own satellite, Ovzon 3. The satellite, which is now under production with our partner Maxar, is scheduled to be launched during the latter part of 2021. Ovzon 3 multiplies our capacity and allows us to offer new services and features, which will further enhance our unique mobile broadband service. We also signed a first major customer agreement with Intelsat regarding the capacity utilization of Ovzon 3.
New and renewed agreements
During the year, we renewed existing contracts with the US DoD, through the US service provider Intelsat General Corporation, IGC. The contract period of 6 months follows the customer's budget process and is expected to be extended at the end of the contract period, however probably with a slightly lower volume since, as described below, we don't have access to IS-39. With the contracts we are now entering our seventh year of service delivery to the US DoD - a proof that our users are very satisfied with our high performance service.
Successful tests of new leased capacity
During the year we continued to expand our delivery and revenue opportunities by securing leased satellite capacity. During the second quarter of 2019 we entered into an agreement with Intelsat regarding capacity on the new satellite Intelsat 39 (IS-39). The launch of IS-39 in August was successful and received a great deal of attention in our industry. The technical tests during the fall of 2019 have shown very good test results. However, due to regulatory circumstances, Intelsat has still not been able to set a date for when to start delivering the service within the agreed geography. This delay is beyond our control, but when we receive a green light, we will be able to offer supplementary coverage in Africa, Europe, the Middle East and Asia. We also signed an agreement with Hispasat that gives us access to satellite capacity for our service in Europe and Latin America.
New distributors and more customer channels
At the end of 2019, we received an initial order when we signed a distribution agreement with Gomedia, one of the leading providers of satellite communications to government agencies and organizations in Italy. In early 2020, we also engaged Network Innovations as distributor in Benelux, Bansat as distributor in Colombia and Orbita as distributor in Peru. With Ovzon's service, the distributor can extend its offer to existing customers but also approach entirely new market segments. With these new distributor agreements, we are rapidly increasing our presence in new markets and we are reaching out to more customers and customer groups.
Opportunities in the satellite market
Sales during the first half of 2020 are expected to be weak to constant until the utilization of our leased capacity increases through new customer agreements.
Ovzon 3 is a key project and our primary focus in the coming years. It is the first of a number of planned satellites forglobal reach for our service based on own satellites.
The market for satellite services is undergoing a shift as demand for broadcast services decreases while demand for mobile broadband is increasing. Several players are investing in mobile broadband on higher capacity GEO satellites (HTS satellites) or on LEO constellations.
With our combination of unique terminals and services, leased capacity and our future own satellites, we are well positioned in the satellite market of the future.
Magnus René, CEO of 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 February 19, 2020.
This information was distributed by Cision http://www.cisionwire.se/