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Primoco UAV SE, the Czech manufacturer of unmanned aerial vehicles generated an operating profit in H1 2020, increased new sales and closed new orders

  • The unmanned aerial vehicle manufacturer Primoco UAV SE grew its sales year-on-year in the first half of the year and moved to EBITDA profitability. The company succeeded despite the fact that contracts for aircraft for which it has an export license have not yet been fully reflected in the financial
  • Further contracts for multiple machines worth more than CZK 400 million are awaiting export permits. These should be granted within a few months and the company will then have secured sales at least until the summer of 2021. Primoco therefore plans to double production by the end of the year and has already started recruiting new employees.
  • The company’s Supervisory Board has appointed a new member, Brigadier General Ing. Josef Rada (retired), who previously worked, among other things, as a fighter pilot on Mig-21 aircraft and later as the director of the Civil Aviation Authority.
  • In the first half of 2020, the company’s share price on the Prague Stock Exchange strengthened by 4.17% to CZK 250 per share.

 

Prague, 3 August 2020 – Revenues of Primoco UAV SE, the Czech unmanned aerial vehicle manufacturer, reached almost CZK 10 million in the first half of 2020. They increased almost eightfold year-on-year. New contracts for the supply of aircraft abroad helped the company achieve operating profit. In addition, Primoco is waiting for an export permit for other machines worth more than CZK 400 million. The start of deliveries is scheduled for the fourth quarter 2020 with full completion in the first half of 2021. The company has therefore already started recruiting new employees. The volume of production should double.

 

Operational and Sales Information

Primoco UAV SE, the Czech unmanned aerial vehicle manufacturer, has had a successful first half of 2020. In the first six months of 2020, despite the tense situation on world markets caused by the coronavirus pandemic, it managed to conclude contracts and obtain permission to export six machines to Asia and Middle East for a total of CZK 48.8 million (EUR/CZK exchange rate as of 30 June 2020). At the end of the first half of the year, some of the aircraft have already been exported from the Czech Republic. The export of the remaining aircraft, for which the company has already received deposits from customers, will take place in the second half of this year.

The full receipt of revenues according to the contracts will take place only after the full completion of deliveries, nevertheless, new orders in the first six months of the year had a favourable effect on the company’s financial results. Primoco increased revenues by 8 times year-on-year to CZK 9.58 million. EBITDA was positive at CZK 25,000, while last year in the same period the company reported an EBITDA loss of almost CZK 12.5 million. As of 30 June 2020, the net loss was significantly reduced to CZK 2.1 million from the loss of CZK 13.6 million in the same period last year.

 

In addition to the six aircraft for which Primoco has already obtained an export permit, in the first half of 2020 another 37 aircraft were in the export permit process for a total of 435.9 million crowns. These deliveries will be made to Asia and the Middle East. Obtaining a permit from the Ministry of Industry and Trade is expected in the coming few months. Primoco expects to start delivering these orders in the fourth quarter of 2020. The deliveries will be fully completed in the first half of 2021. Some of these contracts also include options for further deliveries in excess of the original order amount. In addition, the company is negotiating contracts in the Russian Federation and Central America, the implementation of which were postponed in the first half of 2020 due to the Covid-19 pandemic.

Primoco is also negotiating with the Police of the Czech Republic to potentially use an integrated rescue system whereby the Czech Republic would have one squadron of unmanned aerial vehicles in the future. The machines would be used, for example, to search for missing persons, to coordinate rescue work or to determine the extent of damage in the event of natural disasters. The Czech police have already tested Primoco unmanned aircraft where they were out of sight of the operator-pilot on the ground, known as Beyond Visual Line of Sight (BVLOS) mode during a recent state of emergency for  border protection.

Given the scope of the new orders, Primoco has already begun preparations to at least double the existing production volume of one aircraft per week. The company plans to reach a production capacity of two aircraft per week as early as the fourth quarter of 2020, which is why it has recently started recruiting new employees.

 

Corporate Governance

In addition to obtaining new contracts, the Supervisory Board of Primoco UAV SE was also expanded from one to two members. Josef Rada, Brigadier General (retired) has accepted an offer to become a member of the Supervisory Board. In the past he worked, among other things, as a fighter pilot on Mig-21 aircraft and later as the director of the Civil Aviation Authority.  “As a pilot, I am very pleased to be able to serve on the Supervisory Board of Primoco, which is developing a promising industry of unmanned aircraft in the Czech Republic and thus continues the long tradition of our domestic aviation industry,” says Josef Rada, Brigadier General (retired).

 

With the expansion of the Supervisory Board Gabriel Fülöpp, one of the co-founders of the company, became its Chairman. Gabriel Fülöpp, who has been a member of the Supervisory Board since the establishment of the company in 2015, commented on the financial results: “I am pleased with the successes we have achieved in a difficult period when business trips abroad were practically impossible, and I believe that Primoco will significantly strengthen in the future.

In the first half of 2020 Primoco received an ISO 9001 quality certificate and began the process for certification of a new unmanned aircraft according to the STANAG NATO standard. In April the company made a flight with an aircraft from its own airport in Písek Krašovice with a record duration of 15 hours and 3 minutes. The One 150 Model flew 1,650 kilometres with an average consumption of 2.2 litres of fuel per hour of flight.

Since its establishment in 2015 the company has produced in total 70 unmanned aircraft.

Stock Exchange

The shares of the company has been traded on Prague Stock Exchange in the START programme since 2018. In the first half of 2020, the price increased by 4.17% to CZK 250 per share.

 

Financial Results in First Half 2020

Profit and Loss Account
In thous. CZK 30 June 2020 30 June  2019
Revenues 9,584 1,083
EBITDA 25 -12,473
Operating profit or loss (+/-) -1,409 -13,529
Profit before tax -2,131 -13,588
Profit after tax -2,131 -13,588
Balance Sheet
In thous. CZK 30 June 2020 30 June 2019
Fixed assets 32,160 27,894
Current assets 24,399 19,071
Total assets 56,618 47,055
Equity 29,605 42,191
Short-term liabilities 692 36
Long-term liabilities 25,519 5.000
Total liabilities 56,618 47,055