INTERIM REPORT OCTOBER – DECEMBER 2018
Fourth quarter of 2018 (October - December)
- Net Turnover of SEK 9 million (SEK -0.8 million)
- Operating Loss/EBIT of SEK -27.4 million (SEK -15 million)
- Result for the period of SEK -30.5 million (SEK -14.6 million)
- Cashflow for the period SEK -43.5 million (SEK -29.5 million)
- Earnings per share amounted to SEK -1.04 (SEK -0.61)
- Production of OXE units: 89 (0)
Twelve months to 31stDecember 2018
- Net Turnover of SEK 40.6 million (SEK 14.6 million)
- Operating Loss/EBIT of SEK -87.1 million (SEK -46.9 million)
- Result for the period of SEK -108.2 million (SEK -51 million)
- Cashflow for the period SEK -9.1 million (SEK 5.1 million)
- Earnings per share amounted to SEK -4.04 (SEK -2.70)
- Production of OXE units: 314 (55)
Significant event in the fourth quarter
- Production status – Cimco produced 45 units in the month of September.
- Cimco Marine re-launches the OXE 200hp in October 2018
- Production status – Cimco produced 43 units in the month of October.
- Cimco Marine enters into supply and development agreement with BMW.
This is in respect to the supply of BMW’s Twin Power Turbo Inline-6-Cylinder
3 litre Diesel Engine and selected parts and components.
Significant event after the reporting period
- Cimco Marine AB initiates written procedure to amend certain terms in its up to
SEK 200 million bonds in preparation for a SEK 150 million rights issue of units.
- Cimco Marine AB proposes a rights issue of approximately SEK 154 million
and enters into bridge loan agreement of up to SEK 55 million.
- Notice for an EGM to be held on 8th March 2019.
- Cimco Marine AB obtains the bondholders’ approval regarding amendments of the terms
and conditions for its up to MSEK 200 bonds.
COMMENTS BY THE CEO
During the fourth quarter of 2018, the company achieved production of 89 units. We could have achieved a higher level of production but were faced with a bottleneck due to a single supplier being unable to produce certain parts to the agreed volumes in time. We have worked hard and have found a solution by dual sourcing these components. I am very pleased that we were able to implement this in December. We achieved our stated target of producing 25 units a week in the final working week of December.
Our sales for the 150hp for the quarter was 27 units. This was primarily due to switch of orders by our customers from 150hp to 200hp (which was re-launched in October 2018, whilst the more popular tropical application will be available during Q2 2019);
We purposely slowed our production in November and beginning of December to reduce further production of the 150hp but tested the production capabilities by building 25 units in the last working week of 2018. We are working on several sales projects which could yield significant orders for the 150hp in the near future. Nonetheless our key focus now is to get the production of 200hp OXE stabilised (a tropical compliant variant will be available during Q2 2019).
Our liquidity situation became quite strained from October onwards, and we have reduced level of purchases of parts and negotiated extended credit with our suppliers. We engaged with a number of potential funders as well as shareholders to assist in our funding needs for 2019 and beyond.
Review of 2018
2018 was a challenging year for Cimco Marine and their shareholders. However, during the year good progress were made in several areas, not least when it comes to solving the quality related issues with the 200hp OXE diesel engine which resulted in significant delays in the commercial plans of the company, as communicated during 2017. From a market perspective valuable time was lost and the organization is now working with a clear focus to make up for this lost ground and rebuilding confidence in sales and marketing.
The company introduced the 150hp OXE at the start of the year, whilst the 200hp OXE was taken out of production to resolve its turbo issue as communicated during 2017. The 150 OXE, powered by Opel, proved that the belt propulsion outboard concept worked.
During 2018, I was appointed CEO along with a number of changes in management. We increased our focus on areas such as cost reduction (in Bill of Material), correcting any remaining technical issues, quality assurance, sales and marketing, after sales support, to mention a few. Aftersales inventory was relocated from our production partner to Ängelhom, additional staff and experience have been brought into sales and after sales.
The company focused on achieving a production run rate of 25 units a week. Various quality issues were resolved and bottlenecks in certain components were identified and solutions implemented. Technical issues were resolved in the 200hp OXE and the engine was reintroduced back into production in October. The targeted run rate of 25 units a week was achieved in the last week of December, slightly delayed primarily due to aforementioned bottlenecks with certain key components. In total 314 units were produced for 2018.
For the complete interim report:
Please see attached pdf.
For further information, please contact:
Andreas Blomdahl, CEO Cimco Marine AB, andreas.blomdahl@oxe-diesel.com, +46 431 44 98 99
Anders Berg, Chairman of the Board of Cimco Marine AB, +46 70-358 91 55, anders.berg@oxe-diesel.com
Myron Mahendra, CFO Cimco Marine AB, +46 763-47 59 82, myron.mahendra@oxe-diesel.com
www.oxe-diesel.com
Certified Adviser
Västra Hamnen Corporate Finance AB is Certified Adviser for Cimco Marine AB.
Contact details to Västra Hamnen: tel. +46 40 20 02 50, e-mail. ca@vhcorp.se
Cimco Marine AB (publ) is obligated to make this information public pursuant to the EU Market Abuse Regulation. The information was provided by the contacts above to be submitted for publication on February 28th 2019, 07:30 CET.
Cimco Marine AB (publ) has, after several years of development, constructed the OXE Diesel, the world´s first diesel outboard engine in the high-power segment. OXE Diesel has a unique belt driven propulsion system that allows a hydraulic multi-friction gearbox to be mounted. This means that the engine can handle significantly higher loads than a traditional outboard engine. Cimco´s OXE diesel has a horizontally mounted engine as opposed to a traditional outboard with a vertically mounted engine.