Ovzon: Inconvenient, but not a catastrophe - ABG (R)

(Correction: The Italian partner was earlier described as having financial difficulties. This has since been updated from ABG with the information that the Italian partner has not been paid by its customer, Italian Fire and Rescue Services, which is said to only be a delay and not unusual within the public sector)

2022 EBIT impacted by bad debt provisions of SEK 34m
The provision relates to an Italian partner
Ovzon's financial position remains solid, given recent share issue


Payment issues cause a bad debt provision

This morning, Ovzon announced that its 2022 results will be adversely impacted by further provisions of SEK 34m for bad debt, resulting in total 2022 provisions of SEK 50m. The issue is due to its Italian partner not being paid by one of its customers (the customer is the Italian Fire and Rescue Services, and the partner says that this is only a delay and not unusual with the public sector). As a reminder, on 31 Dec'21, Ovzon announced an order through its Italian partner (USD 9.8m over 14 months) with the Italian Fire and Rescue Service; the largest order the company has ever received outside the US DoD. As such, Ovzon's European-related sales grew 209% y-o-y to SEK 109m in 2022, accounting for 31% of sales (vs. 18% in '21).

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ovzon/equity-research/2023/3/ovzon---inconvenient-but-not-a-catastrophe/