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First Half-Year Results of 2019 for Primoco

  • In the first half of 2019, Primoco UAV recorded revenues of CZK 08 million and an operating loss before interest expenses, taxes, depreciation and amortisation (EBITDA) of CZK 12.5 million.
  • Management expects to conclude a significant contract at the end of this year or during the course of next year.
  • The company has secured financing for operations with support from its founders and a loan from its key shareholders.
  • Primoco will provide a detailed economic forecast for the coming period at the start of next year, including its segment revenue The company expects annual revenues in excess of CZK 1 billion in the long term.

Prague, 25 September 2019 – Primoco UAV SE, a drone manufacturer in the Czech Republic, reported revenues of CZK 1.083 billion and an operating loss (EBITDA) of CZK 12.473 million for the first half of 2019.

The results for the first half of this year saw problems in a longer than expected process of closing a key contract. “We started this year expecting to seal a major deal for delivering unmanned aircraft to a customer in the Middle East. Although the customer increased the number of aircraft ordered, signing the contract was postponed because of political instability in the region. We are confident these difficulties will be overcome and that the contract will be signed at the end of this year or during the course of next year,” said CEO of Primoco UAV Ladislav Semetkovský.

In the meantime, Primoco has broadened its pool of potential clients. It is currently in the final round of a tender for the additional delivery of a large number of aircraft to Malaysia. The company sold three aircraft to the country’s border police force last year. Primoco is also in different stages of negotiation with around twenty new potential clients in other countries.

“When we entered the START Market on the Prague Stock Exchange, we said that the average period of time from establishing contact with a client to delivery of the first aircraft would be one to two years. It’s not so important to us how quickly we sign a given contract, because we prefer to consider the contract’s terms and range of clients we can supply our aircraft to in the future. In this respect, we’re now more optimistic than ever before,” said Semetkovský.

Primoco recently announced plans to start aerial work (drone-as-a-service) in the Russian Federation and Kazakhstan next year. The company will receive regular payments for monitoring oil and gas pipelines with its aircraft.

Obtained this year, the licence to sell military equipment in the Czech Republic will let Primoco supply its aircraft to armed forces. “Today, Primoco not only develops and offers complete production of unmanned aircraft, it also owns all the necessary permits and its own factory airfield in Písek, which was purchased this year. The company’s shares are also publicly traded, and we offer full transparency to our customers. We have an excellent foundation for future development,” said Semetkovský.

The licence to sell military equipment will let Primoco fully develop sales of scaled-down drones serving as unmanned aerial targets for military pilot and air-defence unit training The target drones will become a new product line in addition to the fully equipped drones used for monitoring and surveillance.

Despite the poor economic result of the first half of the year, Primoco has secured financing for its future operations. The company is using shareholder loans from founders Ladislav Semetkovský and Gabriel Fülöpp, who are supporting the company until sufficient aircraft sales are achieved.

Primoco’s management anticipates it will provide an economic forecast for 2020, including its revenue model, at the beginning of next year. The company’s long-term outlook has not changed, as it still counts on achieving annual revenues of more than CZK 1 billion with an EBITDA margin of approximately 30 to 40%.

 

Economic results for 2019

Profit and loss statement
in CZK ’000 30 June 2019      30 June 2018
Revenues 1.083 18.207
EBITDA -12.473 3.930
Operating profit/loss -13.529 3.204
Profit before tax -13.588 2.163
Profit after tax -13.588 2.163
Balance sheet
in CZK ’000 30 June 2019 30 June 2018
Long-term assets 27.894 8.086
Current assets 19.071 21.178
  – Cash 2.401 7.938
Total assets 47.055 29.272
Equity 42.191 -5.562
Current liabilities 36 34.715
Long-term liabilities 5.000 0
Total liabilities 47.055 29.272