OXE Marine AB (publ) Interim report 1 April to 30 June 2023
OXE Marine AB (publ)
Second Quarter 2023
- Consolidated Net turnover amounted to SEK 46.3 m (SEK 45.7 m).
- Consolidated Gross Profit amounted to SEK 0.1 m (SEK 9.7 m) with a gross margin of 0% (21%).
- Consolidated EBITDA amounted to SEK -27.8 m (SEK -8.9 m).
- The consolidated result for the quarter amounted to SEK -43.9 m (SEK -20.6 m).
- Consolidated EPS and Diluted EPS amounted to SEK -0.14 (SEK -0.08).
January - June 2023
- Consolidated Net turnover amounted to SEK 79.1 m (SEK 77.1 m).
- Consolidated Gross Profit amounted to SEK 8.3 m (SEK 18.7 m) with a gross margin of 10% (24%).
- Consolidated EBITDA amounted to SEK -45.2 m (SEK -21.8 m).
- The consolidated result for the quarter amounted to SEK -71.5 m (SEK -44.1 m).
- Consolidated EPS and Diluted EPS amounted to SEK -0.23 (SEK -0.18).
Significant events during the second quarter
- OXE Marine receives orders worth SEK12M (USD1.1M) from United States Defense Logistics Agency.
- OXE Marine expands in South America by appointing new distributors in Brazil and Colombia.
- OXE Marine appointed Paul Frick as new CEO.
- OXE Marine introduced the OXE configurator, that allows the customers to customize their OXE Diesel Outboard.
Significant events during the first half of the year
- OXE Marine receives orders worth SEK12M (USD1.1M) from United States Defense Logistics Agency.
- OXE Marine presented a new concept outboard OXE hybrid 450, the world’s first diesel electric hybrid outboard.
- OXE Marine's water jet engine was nominated for innovation of the year at the Miami international boat show.
- OXE Marine expands in South America by appointing new distributors in Brazil and Colombia.
- OXE Marine expand their footprint in Asia by appointing Creation Co., Ltd as dealers for Japan.
- OXE Marine appointed Paul Frick as new CEO.
- OXE Marine introduced the OXE configurator, that allows the customers to customize their OXE Diesel Outboard.
Significant events after the reporting period
- OXE Marine expands in North America by appointing new distributor in Mexico.
A word from the CEO
Foundations for growth
“There is a lot to be proud of in the second quarter, the highest sales recorded in a quarter in the history of OXE Marine and receiving orders from the United States Defense Logistics Agency. Despite achieving these milestones, we have our sights on the journey ahead where our focus is on expanding and solidifying our service and support network, with one objective - to better serve and support our customer base and the end user”
The orders received from the United States Defense Logistics Agency is something we are very proud of and is a positive reference case to many other governmental and commercial users around the globe. The conversation has changed from “what is OXE” to “why OXE” with many customers opting to make the switch to OXE to take advantage of the significant fuel savings and safety and environmental benefits. We continue to see the interest in diesel outboards grow, with growing acceptance and understanding of the OXE concept as a viable alternative to gasoline outboards or diesel inboards. We have several distributors who have been loyal to OXE and have been patiently growing their markets over the past few years, who are now starting to see more consistent demand for the product and general acceptance for diesel outboards.
Total sales amounted to SEK 46.3 m (SEK 45.7 m) on a consolidated basis. This represents the highest revenue in a quarter since inception. Comparatively this is an increase of 1% relative to the same quarter of the previous year and an increase of 41% to Q1 2023. Year to date total sales amounted to SEK 79.1 m (SEK 77.1 m) an increase of 3% relative to the prior year.
Parts & Accessories contributed 22% (16%) of total revenue in the second quarter with SEK 10.0 m (SEK 7.2 m) in sales. The rapid growth is attributable to the growing population of OXE outboards in the market and the continued focus on this revenue segment. There were no industrial sales this quarter meaning that P&A sales were in line with Q1 2023.
During the quarter Management carried out an assessment of inventory to ensure inventory is held at fair value and to account for older engine model numbers and older part revision numbers. These adjustments impacted gross margin by SEK 13.9m with gross margin amounting to 0% for the quarter. Before making these adjustments, gross margin would have amounted to 30% indicating an improvement in the underlying profitability. Price increases came into effect in Q2, as well as a more favourable product mix and positive effects due to the weakening of the Swedish crown which supports the underlying profitability.
To continuously manage the various product upgrades and versions on the market of both the OXE200 and OXE300 family of engines, we launched a refurbishment (“refurb”) program during the quarter where we systematically remanufacture older engine models that have not been used or used engines requiring upgrades to be sold back into the market. These refurb engines will be sold back into the market at a lower price and with limited warranty and are ideal for demo applications or as spare engines.
The number one challenge we have ahead of us is to build our service and support network as quickly as the demand for the product increases, so that we can deliver on our commitment to offering a reliable solution to demanding users. We have stepped up the intensity in dealer education and training, developing digital tools for knowledge sharing, as well as growing our technical team in all corners of the world, with one objective – to better serve and support our customer base and the end users.
While our focus is undoubtedly on the current product range, we keep an eye on the future by continuing to develop both the water jet and hybrid concept through effective partnerships. There are several water jet applications now on the water in beta testing. The results are very promising, with no to little power loss on the beta testing which is carried out on vessels that have been powered by propellors and switched to jets. In addition to these initiatives, OXE continues to carry out product development projects including our ability to offer a greater variety of steering and control systems to our end users and will benefit all OXE product ranges.
On a personal note, I am very pleased to be appointed the CEO of OXE Marine, one of the most exciting companies in the marine sector. I would like to thank my colleagues for the support received in the first two months. I am again reminded of how many talented people we have and how much has already been achieved in our organisation of only 44 people. We enter Q3 with the mindset of making constant improvements that will make a difference to our customers and end users.
Paul Frick, CEO