Sales in the second quarter amounted to SEK 19m, 70% higher Y/Y and by far the highest quarterly sales to date. Newly acquired Satmission is basically making up for the delta with SEK 7m in sales, which is a bit more than we anticipated. The bulk of sales (excluding Satmission) relates to C2Sat deliveries of maritime antennas to Israel.
Total orders received in Q2 was SEK 22.3m. We are however not sure what is included in this number. The deal with Saab Dynamics that was recently announced is a frame agreement of SEK 10.8m. And Satmission had an order backlog of SEK 4m when acquired. If these amounts are included in the reported SEK 22.3m, then orders received are pretty much as expected. We need to check this.
EBITDA still in the blacks
Kebni reported Q2 EBITDA of SEK 0.9m and hence EBITDA has been positive during the last four quarters. However, including one-off costs, EBITDA was actually just below zero in Q2. Extraordinary items included costs relating to: rebranding of the company, acquisitions (ReQuTech and Satmission) and preparation for listing at Nasdaq First North. Total expenses are a bit higher than we expected, but we don’t know if it’s in COGS or Opex, since the different cost items are not specified.
Brand new brand: KebNi
The rebranding of ASTG to Kebni makes good sense in the light of the new growth plan launched last year. As we understand it “ASTG” has not been used as a marketing brand (but rather C2Sat and AIMS). The business divisions are also rebranded in accordance with the new name.
Kebni recently announced the expansion of its sales organization to India and North America by signing up new representatives in these markets. As far as we understand they will mainly address the government market for maritime antennas. Moreover, the company has hired a CFO. Probably a requirement for the Nasdaq First North listing. The transition from Nordic SME to Nasdaq is planned to take place in the later part of August, but is still subject to final approval.
According to the report, Kebni is starting to see more activities on the sales front, in spite of Covid-19. But as we know, lead times are usually long, particularly for maritime antennas and IMU’s. However, for Satmission lead times could be rather short.
Changes to our forecasts
As mentioned above, Satmission sales were higher than expected causing us to raise our full year sales forecast for the division as well as the group. Q2 Opex seem to be higher than we anticipated. And since Kebni is growing its organization, its probably fair to assume that Opex will continue up. Hence, on balance our earnings estimates for 2020 will likely be lower than before. But probably no significant change in our valuation as our long-term view is intact. However, in H2 2020 we expect much lower sales and earnings compared to H1. The obvious reason is that deliveries of maritime antennas to Israel will be substantially lower. We will be back with a full update shortly.
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