Interim report for AAC Clyde Space AB (publ) January - March 2020
· Net sales amounted to SEK 23.8 M (14.9)
· Earnings before interest, tax, depreciation and amortisation (EBITDA) totalled SEK -6.2 M (-6.5)
· Earnings before interest and tax (EBIT) totalled SEK -9.1 M (-9.9)
· The loss after tax was SEK -9.5 M (-10.1)
· Basic and diluted earnings per share amounted to SEK -0.10 (-0.15)
· Cash flow from operating activities totalled SEK -6.2 M (-5.1)
· The order backlog increased to SEK 183 M (SEK 169 M at year-end 2019)
Significant events in the first quarter of 2020
· AAC Clyde Space has been selected to supply batteries to a value of USD 730,000 for the Nova-C lunar lander mission
· The Israeli firm NSLComm has placed an order for one 6U satellite and services, with a total value of GBP 1.2 million. NSLComm has also appointed AAC Clyde Space as its preferred supplier in its planned satellite constellation
· The US firm Intuitive Machines ordered power systems with an order value of USD 575,000 for a lunar lander mission
· AAC Clyde Space appointed John Charlick as COO and Ross Lang as its UK Head of Finance to the executive management team
Significant events after the end of the reporting period
· Loft Orbital of the US expanded a previous order with the addition of a USD 250,000 order for power systems for two satellites
· The US firm Orbital Micro Systems (OMS) placed an order valued at GBP 642,000 for a 6U satellite. The satellite will be included in the OMS commercial constellation, which aims to deliver accurate and timely weather information
Comments from the CEO
Welcome to the first quarterly report of 2020, in what turned out to be an eventful quarter, with the start of the COVID-19 pandemic. Like other companies, we had to adapt to a new reality: following the advice of the national governments, we issued the first specific COVID-19 guidance to all staff in early March, followed in the middle of the month by a halt to all travel and a move to home working for more than 90 per cent of staff. For those activities that cannot be undertaken remotely, we issued new operational procedures to ensure social distancing practices in a safe working environment.
Despite the pandemic, we managed to maintain a good level of activity throughout our operations. We shipped out two satellites in January, that are now awaiting launch. We received orders for two more satellites, and sold several major subsystems, including our first ones for interplanetary missions - we look forward to seeing our power systems landing on the Moon! And we ended the quarter with a busy month of March with several major project milestones being completed. These advances are reflected both in rising sales and account receivables.
All in all, we achieved an increase in net sales in Q1 of 60 per cent to 23.8 MSEK, with a similar number of employees as last year. We have made a modest improvement in our EBITDA, as earnings were affected by a larger share of third party products in the sales mix. Both numbers are in line with our plan to put the company on a path to growth and profitability. As I wrote in the Q4 report we expect a strong growth in 2020 and to be EBITDA and cash flow positive in 2021.
Our order backlog remains strong, and so far we have not seen a reduction in the appetite for our products and services. Nevertheless, we have taken action to improve our cashflow, delaying non urgent investments and containing expenditure. These measures will allow us to preserve cash and be better prepared to face uncertain times.
As we look towards the near future, we have a busy summer ahead of us with deliveries of subsystems to several customers, commissioning of two satellites and the ramp up for the start of manufacture of seven satellites in our Glasgow facilities. The situation with COVID-19 will continue to influence our decisions and way of working but to date we have adapted well and aim to continue to do so, ensuring that we fulfil the expectations of our customers, staff and investors.