Solid sequential improvements, first Ovzon 3 order
'24e-'26e sales down 18-7% on softer orders than expected
We expect positive EBITDA in H2e
Weaker Q2 than expected, but solid progress over Q1
After a slow start to the year, particularly in the US, Q2 showed solid progress, with sequential growth in satellite services of 58%, to SEK 57m, and a significant slowdown in opex. Even so, total sales of SEK 67m were below ABGSCe of SEK 72m, mainly due to lower than expected terminal sales. The EU, which is an increasingly important market for Ovzon, had a solid quarter, while sales in the US improved to SEK 30m (vs. SEK 13m in Q1), although this remains well below historical levels of ~SEK 50m. More importantly, Ovzon signed its first Ovzon 3-related order after the end of the quarter: a 12-month USD 6.2m order from the US DoD (link). In addition to the important strategic value, the deal replaces the previous 8-month contract with the DoD and represents a 33% upgrade, suggesting that Ovzon is able to charge premium prices for the enhanced service. The satellite's capacity is limited, so we expect prices to continue to increase gradually as the satellite's capacity is further utilised.