Strengthened balance sheet in a challenging environment
Apr-Jun Apr-Jun Jan-Jun Jan-Jun Full-year
TSEK 2020 2019 2020 2019 2019
Revenue 34,983 55,987 94,559 109,348 231,642
Operating -17,313 -9,049 -11,958 -4,389 11,419
Adjusted operating -17,313 3 248 -11.958 21,671 23,716
Profit/loss for the -51,891 12,915 -18,186 8,418 29,230
period after tax
Earnings per share, -1.42 -0.38 -0.51 0.29 0.93
Comments from the CEO
During the second quarter of the year, we further strengthened our financial position through a capital raising where, among other things, the 4th AP Fund entered as a new shareholder. Our strong financial position gives us stability and room to maneuver as we build the company to prepare for our own upcoming satellite Ovzon 3. On the business side, we now have established a collaboration with Airbus as a distributor and we sell together with them to their customers in the defense industry. Together with the distributors we appointed in the first quarter, we thus have a broad sales organization.
Sales work and Covid-19
Our sales and marketing activities were limited by Covid-19 during the quarter. The trade fairs that are important to the industry have been canceled or postponed. We have also not been able to travel as usual to demonstrate our service to existing or potential customers. The turbulent situation in the world economy following the outbreak of Covid-19 and the lower six-month contract from the US DoD signed in March meant, as we predicted in the previous quarterly report, that sales and profitability weakened in the short term during the quarter.
The lower turnover has a direct impact on our gross profit as it means that we have a lower utilization of our leased satellite capacity. The contract with US DoD runs until September and in July we secured another quarter with this customer at a slightly higher level as we expanded the offer with a steerable antenna on Intelsat's IS-39 satellite, where we lease capacity for our service. In this way, we pave the way for Ovzon 3, which is equipped with several steerable antennas.
To secure additional capacity in the important Ku30b frequency band, we agreed in August with Intelsat on access to three powerful steerable antennas on the Intelsat 39 (IS-39) and Intelsat 37 (IS-37) satellites. The agreement replaces and expands the previous agreement regarding capacity on IS-39. The agreement is an important step for Ovzon to expand our opportunities to serve customers with demands for global reach of high-bandwidth services, and it thus paves the way for our upcoming Ovzon 3 satellite.
Strengthened balance sheet and organization
In June, we further strengthened our financial position through a capital raising totaling approximately MSEK 500 in two steps; a directed new issue of MSEK 350 to, among others, the 4th AP Fund and a rights issue of approximately MSEK 150. The rights issue was subscribed for at 150 percent, a good proof of investors' interest in the growth opportunities we face.
To continuously strengthen our organization is crucial to capture future growth opportunities. During the quarter, the management team was therefore strengthened with Nils Norén as Chief Development and Production Officer and Tom Hopkins as Chief Operations Officer - two important recruitments for key positions, in line with our growth strategy.
Ovzon 3 on schedule
Ovzon 3, which is now in production at our partner Maxar, is planned to be launched during the latter part of 2021. The pandemic has not affected the satellite construction, which is progressing according to plan. With Ovzon 3 our capacity multiplies, and the satellite gives us the opportunity to offer new services and increased functionality. Ovzon 3 is the first of a number of planned satellites for global reach for our service based on our own satellites.
The external business environment continue to be challenging and we do not expect any improvement in 2020. This affects our ability to take on new business and the turnover rate during the remaining part of 2020 will thus be in line with the turnover rate in the second quarter, which means that turnover for 2020 will be lower than for 2019.
We are, however, well positioned. We have a strong balance sheet, we are strengthening the organization, we have added new satellite capacity and taken our first contract on a steerable antenna.
In this difficult business climate, we are preparing to be in a position to grow in 2021.
Magnus René, CEO
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 08.30 CET on August 18, 2020.