Ovzon's result for 2022 negatively affected by further provisions of MSEK 34 for bad debt
Following newly unveiled information regarding the financial situation of its Italian distributor, Ovzon has chosen to make further provisions for bad debt related to the distributor. The parties have agreed on a payment plan and Ovzon has secured receivables through a pledge on the distributor’s assets. The provision is nevertheless made as a precautionary measure. As a result, the company’s previously published result in the year-end report 2022 is negatively affected by an additional MSEK 34. The result for the fourth quarter of 2022 amounts therefore to MSEK -43 (previously MSEK -8) and MSEK -36 (previously MSEK -2) for the full year 2022.
”Our end customer, the Italian Fire and Rescue Services, performs a societal critical function which is why we have made the decision to continue the delivery of the service despite the distributor’s financial difficulties. With this customer as reference, we continue to gain interest and opportunities with civil and defense customers in Italy. Our Italian distributor has more severe financial difficulties than previously assessed. Regardless of the agreed repayment plan and a pledge of assets, we are now choosing to make this provision as a precautionary measure”, says Per Norén, CEO of Ovzon.
On December 31, 2021, Ovzon signed an agreement at a value of MUSD 9.8 with its Italian distributor for the delivery of Ovzon SATCOM-as-a-Service to the Italian Fire and Rescue Services. The service extends until the end of April 2023 and started in April 2022. During the fall of 2022, it emerged that the distributor was experiencing financial difficulties and had fallen behind with its payments to Ovzon. In the interim report for the third quarter of 2022, bad debt provisions were made regarding the outstanding receivables of MSEK 6 and in the fourth quarter an additional MSEK 10. In total, the bad debt provisions related to the receivables, including this additional provision of MSEK 34, amount to MSEK 50 for the full year 2022, of which MSEK 44 in the fourth quarter. The result for the full year 2022 and the fourth quarter is thus negatively affected by the equivalent amount. Ovzon foresees no need for further funding following this provision.
The accounting consequences of the provisions regarding the fourth quarter and the full year 2022 are summarized in the table below.
| Updated | Previously announced | Updated | Previously announced | |||
| Oct-Dec2022 | Oct-Dec2022 | Oct-Dec2021 | Jan-Dec2022 | Jan-Dec2022 | Jan-Dec2021 | |
| Net sales | 101,109 | 101,109 | 73,209 | 356,993 | 356,993 | 191,378 |
| Operating loss/profit | -42,792 | -8,685 | -29,030 | -81,064 | -46,958 | -113,383 |
| whereof provisions | -10,000 | -10,000 | -16,000 | -16,000 | ||
| whereof further provisions | -33,772 | -33,772 | ||||
| Net result | -42,692 | -8,585 | -21,723 | -36,185 | -2,079 | -83,854 |
Webcast
CEO Per Norén and CFO Noora Jayasekara will answer questions in a webcast on March 22, 2023, at 2 pm CET.
The webcast will be available via the following link: https://onlinexperiences.com/Launch/QReg/ShowUUID=30FEE1EC-478D-426E-862C-2BD67E5602E2
To participate via conference call, please register via the following link and follow the instructions: https://register.vevent.com/register/BIe2eb9a8675d5418e9a94708367cc0c6d
This information is information that Ovzon AB (publ) is obligated to make public pursuant to the EU Market Abuse Regulation 596/2014. The information in this press release has been published through the agency of the contact persons set out below, at the time stated by Ovzon AB’s (publ) news distributor Cision upon publication of this press release.