The UAV manufacturer Primoco UAV SE increased its sales eightfold year-on-year in the first half of the year, turning operating losses into a positive EBITDA. The company succeeded, although the results do not yet fully reflect the orders for aircraft for which it has obtained an export licence.
Further contracts for dozens of machines worth more than CZK 400 million are waiting for an export licence, which should be granted in a matter of weeks or months, so the company will have secured sales at least until the summer of 2021. Primoco thus plans to double production by the end of the year, and it has already started hiring new employees.
There is also a new addition to its Supervisory Board: Josef Rada, a retired general, who in the past worked, among other things, as a fighter pilot on MiG-21 machines and later as the director of the Civil Aviation Authority.
In 1H 2020, the company’s shares traded on the PX Start market of the PSE went up by 4.17% to CZK 250.
The sales of Primoco UAV SE, the manufacturer of unmanned aircraft, reached almost CZK 10 million in the first half of 2020, increasing almost eightfold year-on-year. The new contracts for aircraft from abroad shifted the company into the black. Furthermore, Primoco is waiting for an export licence for other orders worth more than CZK 400 million. They will be shipped starting from Q42020 until the first half of 2021. The company has thus started recruiting new employees. The volume of production is expected to double.
Operational and sales information
Primoco UAV SE, the Czech manufacturer of unmanned aerial vehicles, has had a successful half-year. In the first six months of 2020, despite the turbulent world markets caused by the coronavirus pandemic, it signed contracts worth CZK 48.8 million (converted with the EUR/CZK exchange rate of 30 June 2020) and obtained corresponding export licences for six machines for customers from Asia and the Middle East. By the middle of the year, some of the machines had already left the customs area of the Czech Republic. The remaining aircraft, for which the company has already received advance payments, will be exported in the second half of this year.
According to the contractual conditions, the sales will be booked in full only after the completion of deliveries. Nevertheless, new orders in the first six months of the year had a favourable effect on the company’s financial results. Primoco’s sales rose by 785% year-on-year, to CZK 9.58 million. The operating EBITDA reached CZK 25 thousand, while in the same period of the last year, the company reported an EBITDA loss of almost CZK 12.5 million. As of 30 June 2020, the net loss was significantly reduced to CZK 2.1 million from CZK 13.6 million in the comparable period last year.
“We are doing well, thanks to the efforts of all our team members and despite the coronavirus pandemic and the difficulties related to travel and negotiation of new business contracts abroad. We have won the most contracts since the company was established in 2015. After five years of the company’s existence, we can report an operating profit, without being burdened by bank loans, and after incurring the costs of developing our own UAV,” says Ladislav Semetkovský, the co-founder and director of the company.
In addition to the six machines for which Primoco has already obtained an export licence, the approval process is pending for another 37 machines worth CZK 435.9 million in 1H 2020. These deliveries, too, will go to Asia and the Middle East. The Ministry of Industry and Trade is expected to issue the licences in the coming weeks or months, and Primoco hopes to start working on those contracts in Q42020. The deliveries will be fully completed in the first half of 2021. Some of these contracts also include options for further deliveries in excess of the original volume. In addition, the company is working towards concluding negotiations in the Russian Federation and Central America. The respective deals were postponed in the first half of 2020 because of the Covid-19 pandemic.
Primoco is also negotiating with the Czech police about the possibility of adding a UAV squadron to the integrated rescue system of the Czech Republic. The machines would be used, for example, to search for missing persons, to coordinate rescue work, or to determine the extent of damage in the event of natural disasters. During an emergency situation during border surveillance, the Czech Police have already tested Primoco unmanned aircraft which were out of sight of the operator on the ground. This operating mode is known as Beyond Visual Line of Sight (BVLOS).
Given the extent of the new orders, Primoco has already begun preparing to at least double the existing production volume of one aircraft per week. The company plans to reach the production capacity of two aircraft per week as early as Q42020, so it has already started recruiting new employees.
Corporate Governance
Besides new contracts, the number of members of the Supervisory Board of Primoco UAV SE has increased from one to two. Josef Rada, a retired brigadier-general, who in the past worked, among other things, as a fighter pilot on MiG-21 machines and later as the director of the Civil Aviation Authority, accepted the offer to serve on the Supervisory Board.
“As a pilot, I am very pleased to sit on the Supervisory Board of Primoco, which is developing a promising UAV industry in the Czech Republic, building on the long tradition of the Czech aviation industry,” says Josef Rada.
Along with this step, a chairperson of the Supervisory Board was elected: Gabriel Fülöpp, another co-founder of the company, who has been on the Supervisory Board since the company was established in 2015. “I am proud of the success we have achieved in a difficult period when travel abroad was limited. Primoco is building a future-proof position,” comments Gabriel Fülöpp on the company’s financial results. “In addition, we have recently demonstrated the high level of sophistication of our solution: we were able to put into operation a vehicle delivered to a customer at a distance of ten thousand kilometres, and we successfully performed a series of flights.”
Other highlights of the first half of 2020 include the ISO 9001 quality certificate and the start of the certification process of the UAV according to the NATO STANAG standard. Also, a flight with a record duration of 15 hours and three minutes took off from the company airport in Písek Krašovice in April. The One 150 model flew 1650 kilometres with an average consumption of 2.2 litres of fuel per hour of flight.
Since its founding in 2015, the company has produced a total of 70 unmanned aerial vehicles.Full press release: http://investor.uav-stol.com/news/cesky-vyrobce-bezpilotnich-letounu-primoco-uav-se-dosahl-v-1h-2020-provozniho-zisku-zvysil-trzby-a- concluded-new-orders /
03.08.2020