OXE Marine AB (publ) Interim Report 1 April to 30 June 2024

OXE Marine AB (publ)
Second Quarter 2024
· Consolidated Net turnover amounted to SEK 45.4 m (SEK 46.3 m).
· Consolidated Gross Profit amounted to SEK 14.4 m (SEK 0.1 m) with a gross margin of 32% (0%).
· Consolidated EBITDA amounted to SEK -11.3 m (SEK -27.8 m).
· The consolidated result for the quarter amounted to SEK -20.0 m (SEK -43.9 m).
· Consolidated EPS and Diluted EPS amounted to SEK -0.06 (SEK -0.14).
January - June 2024
· Consolidated Net turnover amounted to SEK 84.5 m (SEK 79.1 m).
· Consolidated Gross Profit amounted to SEK 25.1 m (SEK 8.3 m) with a gross margin of 30% (10%).
· Consolidated EBITDA amounted to SEK -30.2 m (SEK -45.2 m).
· The consolidated result amounted to SEK -53.3 m (SEK -71.5 m).
· Consolidated EPS and Diluted EPS amounted to SEK -0.16 (SEK -0.23).
Significant events during the second quarter
· OXE Marine received a purchase order worth USD 0.9 m from a US boat builder with an option to increase the total order to USD 3.3 m.
· OXE Marine announced collaboration with trim and stabilization systems provider Humphree.
Significant events during the first half of the year
· OXE Marine received a purchase order worth USD 0.9 m from a US boat builder with an option to increase the total order to USD 3.3 m.
· OXE Marine received a purchase order worth USD 0.9 m from the US Department of State.
· OXE Marine announced collaboration with trim and stabilization systems provider Humphree.
· OXE Marine signed distributor agreement with SARJ in Sweden and Finland.
· OXE Marine signed distributor agreement with Bota Technik in Poland.
· OXE Marine continued expansion of dealer and OEM network in the US.
Significant events after the reporting period
· OXE Marine received a confirmation from US boat builder to increase the previously announced order from USD 0.9 m to USD 3.3 m.
· OXE Marine received order of USD 1.5 m to supply a United States governmental agency.
· OXE Marine prepares control balance sheet.

A word from the CEO
Growth in the US
“The recent orders in the US have shown the momentum OXE is gaining in the governmental segment, receiving orders from two different agencies. In addition to this OXE also received a significant order to deliver OXE engines to a US boat builder which are to be built in our US facility, showing the importance of having a presence in the market.”
 
Total sales for the quarter were in line with total sales for the same quarter of the previous year and amounted to SEK 45.4 m (SEK 46.3 m), a decrease of 2%.
 
Propulsion sales amounted to SEK 34.1 m (SEK 36.2 m) representing a decrease of 6% relative to the same quarter of the prior year. With the recent announcement of contracts received for USD 3.3 m with a US boat builder and USD 1.5 m with a US Governmental Agency, the overall demand for OXE’s products is robust and these types of orders bring greater stability to the business as well as production planning. Sales from Parts & Accessories amounted to SEK 11.3 m (SEK 10.1 m), representing growth of 12% relative to the same quarter of the prior year. Parts & Accessories contributed 25% (22%) of total revenue in the second quarter.
 
Gross profit margin amounted to 32% (0%) during the quarter. This is the second highest gross margin reported during a quarter. Price increases were implemented effective 1 April on all new orders and so we have not yet seen the full effect of the price increases and the majority of sales delivered during the quarter were ordered prior to 1 April.
 
Operating expenses (OPEX) for the quarter amounted to SEK -26.5 m (SEK 36.8 m). OPEX also improved by SEK 1.5 m relative to Q1 2024 and moves closer to the target of keeping OPEX under SEK 25 m per quarter.
 
In June, OXE received an order of USD 3.3 m from a US boat builder of which USD 0.9 was confirmed in June and the balance of USD 2.4 m confirmed in July. The order involves deliveries of the OXE200 as an inboard engine. It is encouraging to see the Company broaden its revenue streams with the OXE200 offering as an inboard, which is a good alternative for inboard applications wanting compact engines with a high power to weight ratio. Furthermore, this order will be cash generative with several key components of the bill of material, such as the powerhead and engine control unit, already in inventory.
 
To achieve a balance in inventory, the company paused production for a month in both Q1 and Q2. As a result, SEK 11.4 m was generated in cash as a result of the lower inventory. At the end of Q2 quarter, there were effectively no available engines for sale as a result of a shift in strategy to reduce inventory balances and run production on a build-to-order basis.
 
The company ended the quarter with SEK 8.6 m available cash and after the quarter end USD 0.9 m (SEK 9.7 m) was received as a prepayment on the US boat builder order of USD 3.3 m.
 
Equity in the parent company OXE Marine AB was SEK 8.1 m at the end of the quarter and brings the balance close to the statutory minimum required level. The board is actively engaged to increase the available equity in the parent company.
 
During the first half of the year, we saw a high number of engines commissioned, a positive signal that the time between an engine leaving the factory and being installed on a boat has shortened significantly and adds to the growing number of engines in operation, as well as hours of operation, driving growth in P&A as customers require service kits and parts to maintain their fleet of engines.
 
As we have stated before, from an engineering standpoint, we have focused engineering resources on continuous product development for the past year with positive customer feedback received on the performance of the product in the field, after implementation of these improvements.
 
Lastly, one of the highlights of the quarter was OXE’s representation at Sea Work in Southampton, UK where OXE’s growth in the market was very visible with four different end customer applications on display (see front cover) including a large fleet customer in the offshore wind farm segment. This was a proud moment for all of us working with the brand. Our target market is commercial and governmental users with high hours of operation. We continue to see growing interest in these segments from around the world. This is thanks to the hard work of our distributors, dealers, OEM’s and the employees of OXE who continue to increase confidence in the brand and with a focus on building a service network to support the end customer.

Paul Frick, CEO