Ovzon: Expansion order with SSC - ABG

Comment re-published: we have corrected a factual error. We originally thought the value of the new order was SEK 132m whereas it was an extension of SEK 17m, lifting the total value of the original order of SEK 115m to SEK 132m. We apologise for any inconvenience.

• Signs expansion order from Swedish Space Corporation
• New run-rate of SEK 132m
• The SEK 132m to be paid in 2024 - much supportive to B/S and CF

Extended order from SSC
This morning Ovzon announced that it has received an extended SATCOM-as-a-Service order from Swedish Space Corporation (SSC). The extended order means that Ovzon has extended the SEK 115m order that the company signed in September, comprising a value of ~SEK 17m and bringing the new run rate to SEK 132m. As we pointed out in our September commentary, the order represents a contraction compared to the annualised December 2023 order (annualised value of ~SEK 180m), which is likely partly due to a lower share of terminal sales. That said, it should be noted that today's order also includes additional On-The-Move satellite terminals (share not specified).

The SEK 132m to be paid in 2024
Although SSC's September extension was expected, today's extension was not, per se, expected, although a gradual improvement in sales is already factored into our forecasts, partly in light of the fact that Ovzon-3 is now operational (but not fully utilised). The impact of the announcements on sales estimates may therefore be limited at first sight. However, a positive aspect of the extended order is that it will be paid to Ovzon in 2024, supporting both its B/S (NIBD excluding leasing of SEK 546m in Q3) and cash flow.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ovzon/equity-research/2024/11/ovzon---expansion-order-with-SSC/