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Financial Results of Primoco UAV SE for 2019

  • In 2019, Primoco UAV SE did not enter into any new business agreements and reported an operating loss before interest expense, taxes, depreciation and amortization (EBITDA) of CZK 20.9 million.
  • The management is at an advanced stage of negotiating the sale of new aircraft to 37 customers in Asia, the Middle East, Africa and Central America worth a total of EUR 86 million.
  • The company has been authorized to provide aerial services in the territory of the Russian Federation.
  • At the end of the accounting period, the company entered into a service contract in the amount of EUR 1 million and the possibility of supplying two new aircraft worth EUR 1.5 million.
  • Thanks to the support of the founders, the company has secured the funding of the operation with a loan from the main shareholders.

 

Prague, 28 April 2020 – Primoco UAV SE, Czech manufacturer of unmanned aircraft, reported revenues of CZK 1.53 million and an operating loss (EBITDA) of CZK 20.94 million in 2019. The company has not signed any new sales agreements.

The results in 2019 were negatively affected by the lengthy process of concluding a key contract. “In 2019, we were expecting that we would sign a major order to deliver unmanned aircraft to a customer in the Middle East. On the one hand, this customer increased the number of aircraft ordered, but on the other hand, the signature of the contract was postponed due to political instability in the region and now the outbreak of the Covid-19 pandemic. We believe that these difficulties will be overcome and that the contract will be signed, but we are not able to estimate the date of signature at this time. ,said Ladislav Semetkovský, CEO of the company.

In 2019 Primoco UAV expanded the list of potential clients. “The company is at an advanced stage of negotiating the sale of new aircraft to 37 customers in Asia, the Middle East, Africa and Central America worth a total of EUR 86 million. The total potential orders would include delivery of 150 aircraft.” Semetkovský added.

Primoco UAV also entered into a contract of EUR 1 million to provide servicing and spare parts to a current client in Malaysia, and the client also acquired an option for two new unmanned aircraft worth EUR 1.5 million. The contract is currently being fulfilled.

Last year, Primoco UAV also obtained permission to fly in the airspace of the Russian Federation. “For almost three years we have been working on the possibility of providing aerial services with an unmanned aircraft in Russia. Today, we are delivering the only unmanned aircraft with a maximum take-off weight of 150 kg which is authorized to do so. We will start receiving regular payments for these services later this year. Unfortunately, in the context of Covid-19, all contracts planned for 1H 2020 have been postponed,” said Semetkovský.

The license for sales of military equipment, which Primoco received in 2019 in the Czech Republic, will allow us to offer aircraft to military clients. “Primoco provides not only the development of an unmanned aircraft but complete production as it is holding all necessary permits, its own factory and airport in Písek, and its shares are publicly traded providing transparency for our customers. Furthermore, the certification of our unmanned aircraft to military standards is currently underway and we expect a type certificate in 2020,“ added Ladislav Semetkovský.

When we entered the Start Programme of the Prague Stock Exchange, we stated that the average time from establishing contact with a client to the delivery of the first aircraft is one to two years. Therefore, it is not so important for us how quickly we sign each order, but rather to pay attention to the parameters of each contract and also the number of clients to whom we can supply our aircraft in the future. We are now much more optimistic in this respect than before,” stated Ladislav Semetkovský.

Despite the negative economic result in 2019, Primoco has secured funding for its operating activities. The company is using shareholder loans from the founders Ladislav Semetkovský and Gabriel Fülöpp who are ready to support the company before the increase of sales of aircraft. The company does not have any debt to third parties. The long-term outlook of the company has not changed. It still expects to achieve annual sales of over CZK 1 billion with an EBITDA margin of about 30-40 percent.

 

Expected events in 2020

  • The concluded service contract in the amount of EUR 1 million, Asia
  • Sales of 2 new unmanned aircraft, Asia
  • Commencement of aerial services in H2 2020 on the territory of the Russian Federation
  • Sales of 3 new unmanned aircraft, Central America
  • Sales of 9 new unmanned aircraft to industrial partners, Europe and North America
  • Sales of 4 new unmanned aircraft, Middle East

The total volume of orders and revenues this year is in a relatively wide range and may change significantly, and the company has therefore decided not to provide a financial outlook for this year. We will keep investors informed about significant contracts.

 

Financial results for 2019

Profit and loss statement
in thous. CZK 31/12/2019 31/12/2018
Revenues 1,532 27,528
EBITDA -20,946 4,075
Operating profit or loss (+/-) -23,966 2,030
Profit before tax -23,966 379
Profit after tax -23,966 379
Balance Sheet
in thous. CZK 31/12/2019 31/12/2018
Fixed assets 33,325 8,075
Current assets 19,141 47,921
Total assets 52,524 56,074
Equity 31,736 55,779
Short-term liabilities 0 202
Long-term liabilities 20,514 0
Total liabilities 52,524 56,074