Cimco Marine: Interim Report 1 July to 30 September 2019 - and New Financial Objectives
STOCKHOLM, Nov. 15, 2019 /PRNewswire/ -- Third quarter of 2019 (July- September 2019)
- Net Turnover of SEK 23.3 million (SEK 3.8 million)
- Operating Loss/EBIT of SEK -18.7 million (SEK -17 million)
- Result for the period of SEK -20.8 million (SEK -22.9 million)
- Cashflow for the period SEK 23.1 million (SEK 7.1 million)
- Earnings per share amounted to SEK -0.16 (SEK -0.87)
- Diluted earnings per share amounted to SEK -0.11 (SEK -0.87)
- OXE units sold: 70 (4)
- The company will not push to deliver 600+ units for 2019
- New long-term financial objectives for the years 2020-2024
- EBITDA margin of >25% by the end of 2024;
- Average Organic Sales growth >50% per year; and
- Operational cashflow positive no later than 2021.
First nine months of 2019 (January - September 2019)
- Net Turnover of SEK 51 million (SEK 31.5 million)
- Operating Loss/EBIT of SEK -65.3 million (SEK -59.8 million)
- Result for the period of SEK -76.4 million (SEK -77.7 million)
- Cashflow for the period SEK 33.4 million (SEK 34.3 million)
- Earnings per share amounted to SEK -0.91 (SEK -3.06)
- Diluted earnings per share amounted to SEK -0.54 (SEK -3.06)
- OXE units sold: 167 (130)
Significant events in the Third quarter
- Enters into a €14 million credit facility agreement with European Investment Bank ("EIB").
- Appoints Paul Frick as new CFO effective 9th September 2019.
- Obtains Bondholder approval for a waiver in respect to certain terms of up to SEK 200 million.
- Obtains shareholder approval following EGM in respect to issuance of share warrants to EIB for tranche A and B loan drawdown.
- Issue 13,365,367 warrants to EIB relating to tranche A.
- Receives first tranche of €4 million from EIB.
- Incentive program 2019/2022 outcome - first 5 million share warrants offered and subscribed fully by certain senior managers.
- Enters into letter of intent with African governmental supplier to supply OXE150s/200s with a total expected revenue of €5 million including accessories, service kits and spare parts.
- Marketing launch of the OXE300 and opening of order books.
Significant events after the reporting period
- Agreed in principle with EIB that second tranche drawdown condition will include a directed issue.
- Received subscription and guarantee commitments for exercise of warrants series 2019:1.
- Received approximately SEK 33.6 million through the exercise of warrants and planed for a directed share issue of approximately SEK 17.2 million.
- The board of directors resolved on a directed share issue of SEK 17.2 million.
COMMENTS BY THE CEO
In the third quarter the company continued with a positive sales development. The company achieved a gross profit of SEK 2.77 million and a gross margin of 12% during the period. This was primarily driven by sales of the OXE200, which has a higher gross margin as well as unit sales directly to an end user at a higher margin. Whilst I expect the trend to continue, the gross margin growth may not be linear.
Following strategic discussions and review, in order to prepare for the future, the company will continue to have a focused approach to developing sales in the shorter term and ensure it maintains delivery of quality to its end users. As a consequence, the company decided not to push for 600+ units for 2019 but instead maintain a steady and sustainable ramp-up in close collaboration with customers and continue to invest into quality and support to the customers which has given good results in the last few months. In addition, new updated long term objectives for the years 2020-2024 will be as follows:
- EBITDA margin of >25% by the end of 2024;
- Average Organic Sales growth >50% per year; and
- Operational cashflow positive no later than 2021.
In July we announced the company entered into a €14 million credit facility with the European Investment bank ("EIB"), which over time will help support more aggressive sales and marketing initiatives, finance development projects, operational expenses and working capital needs. This is a very significant endorsement by a well-respected financial institution (backed by EU member states), who carried out detailed due diligence on the company over a twelve-month period. We received the first tranche of €4 million from EIB in mid-September. Further funding has also been secured following the exercise of share warrants as well as directed share issue totalling SEK 50.8 million in October. If we fulfil certain conditions, this will enable us to draw the second tranche of €4 million from the EIB, most likely during Q1 2020.
With funding secured, we are fully focused on our operational performance. As described in our previous interim report, I now have completed the appointment of my senior management team, following the appointment of Jerry Ojala as Chief Operating Officer (COO) at the end of September. I am highly confident of our senior management team to deliver the full potential of the OXE.
We continue with an immense focus on quality, which includes sourcing parts from Tier 1 automotive suppliers, the meticulously testing of improvements and upgrades by our engineers, assembly improvements and after sales care with our customers. Ultimately quality drives sales and with our disruptive technology, being the only provider of commercial high-powered diesel outboard engines in the world, it is imperative we work closely with the end users and better understand their demands and requirements.
We have been very detailed with our planning of the OXE300 - we officially launched the marketing of this game changing product at the Genoa boat show in September. Start of production of the OXE300 is May 2020 and we expect to have built a significant order book just prior to start of production.
I am confident of meeting our key objectives and delivering commercial success of our patented belt propulsor system.
Myron Mahendra
CEO - Cimco Marine AB
For further information, please contact:
Myron Mahendra
CEO Cimco Marine AB
+46-763-47-59-82
[email protected]
Anders Berg
Chairman of the Board of Cimco Marine AB
+46-70-358-91-55
[email protected]
Certified Adviser
FNCA Sweden AB is Certified Adviser for Cimco Marine AB (publ). Contact details to FNCA Sweden AB: tel. +46 8 528 00 399, e-mail [email protected].
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 15th, 2019, 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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The following files are available for download:
Cimco Marine AB - Q3 2019 INTERIM REPORT |
SOURCE Cimco Marine
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