I-Tech AB (publ) Interim report Q2 2021
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Summary of the period
” Positive key events in a challenging business cycle ”
• Net turnover for the period amounted to 12 819 (16 150) kSEK, corresponding to a decrease in
turnover of -21% (28%). Operating profit/loss amounted to -3 192 (47) kSEK.
April to June 2021
• Chugoku Marine Paints launched SEAFLO NEO M1 PLUS, another global Selektope®-powered antifouling paint.
• I-Tech received an order worth SEK 53 million from Chugoku Marine Paints.
• I-Tech held its Annual General Meeting in May. A decision on a warrant program for management and other employees was taken at the meeting. The program is now implemented and subscribed to 93%.
Important events after the period
• No important events have occurred after the period.
All amounts in TSEK
|2021 Apr-Jun||2020 Apr-Jun||2021 Jan-Jun||2020 Jan-Jun||2020 Jan-Dec|
|Net sales||12 819||16 150||27 277||29 675||52 819|
|Operating result||-3 192||47||-3 134||-937||-5 167|
|EBITDA||-1 213||2 045||821||3 049||3 600|
|Net result||-2 381||-364||-1 966||-896||-4 806|
|Operating cash flow||-7 611||1 055||-7 913||1 351||5 388|
|Equity at end of period||105 620||110 512||105 620||110 512||106 602|
|Cash and cash equivalents at end of period||33 460||39 886||33 460||39 886||40 981|
We expect that the new products launched by our customers over the past two quarters will provide new momentum to our sales growth. However, we are still limited by the impact of the pandemic in Asia, with locally-ordered shipyard closures and generally high material costs for customers.
Sales for the second quarter amounted to SEK 12.8 (16.2) million and, for the first half of the year, sales amounted to SEK 27.3 (29.7) million. Sales grew organically (adjusted for currency effects) by 3% on a half-year basis, despite declining by -11% in the second quarter. The operating loss amounted to -3,192 (47) kSEK, which is mainly attributed by non-recurring costs in connection with the launch of an employee warrants program and a lower gross profit as a result of lower sales. The gross margin amounted to 51 (47)%, a level that is close to the previous quarter’s levels, thanks to stable deliveries, cost control and a slightly broader customer mix than the previous year. Over the period significant inventory build has occurred to secure the deliveries over the coming quarters. This have had a negative effect on the cash-flow, which amount to -7 040 (893) kSEK.
Business highlights during the quarter include CMP’s launch of a new global antifouling paint, SEAFLO NEO M1 PLUS, a Selektope®-powered product intended for both the new construction market and the maintenance market. The product has a lower amount of solvent than the one it replaces and this, together with the use of Selektope®, contributes to a product with a better sustainability profile.
CMP, who accounted for the majority of sales during the quarter, placed a new order for Selektope® worth SEK 53 million. This testifies to the fact that our customers are optimistic, want to stay ahead and want to secure production capacity for the next 18 months. The order itself is at the same level as the one we received before the pandemic started and indicates that we now see a more predictable future, not least with regard to the investment in Selektope®-containing products with fuel-saving capacity.
After a 60-month sailing interval, very positive results have been obtained from the tanker, Calypso. The results are both numerical and visual, and provide a convincing picture that Selektope®, together with customers’ own coating technologies, can significantly reduce fuel consumption relative to the average value of the world fleet. A so-called average weighted speed loss of 0.5% was reported, which is impressive given the tanker’s operating pattern over the period. According to various sources, the average weighted speed loss of the world fleet is 5.9% over a docking-period. This shows that Selektope® can generate good fuel savings, whilst at the same time significantly reducing the biocide content.
In summary, we are still in the challenging business cycle that has characterised the business since the rapid slowdown in the third quarter of 2020. As the effects of COVID-19 are slowly diminishing, challenges related to exceptionally high raw material costs for metal oxides and solvents (which make up a relatively large part of all antifouling products) are increasing. However, I am convinced that growth will return and be strengthened due to the fact that we have a broader customer base and more products on the market from CMP. In addition, there is increased environmental focus in the market as the IMO decided during the summer to introduce the ”EEXI” (energy efficiency index for existing ships) and ”CII” (carbon intensity indicator) regulations that focus on reducing emissions throughout the world fleet, both when it comes to choice of design, systems and components, as well as how ships are operated and maintained.
Philip Chaabane, CEO
M: +46 73 910 37 08
About I-Tech AB
I-Tech is a biotechnology company that has developed the product Selektope®, an active agent that prevents barnacle attachment on submerged surfaces such as ships and boat hulls, but also other marine installations. By increasing the resistance to barnacle growth in marine paint systems (e.g. antifouling coatings), fuel and maintenance costs are reduced. I-Tech has obtained the necessary regulatory approvals for Selektope® and has several of the world's largest manufacturers of marine antifouling coatings as customers. The company's share is listed for trading on Nasdaq First North Growth Market in Stockholm with Erik Penser Bank as Certified Adviser, phone: +46 (0)8 463 83 00, email: firstname.lastname@example.org. For more information visit our website www.i-tech.se.
Selektope® introduces, for the first time, a pharmacological mode of action to combat barnacle settlement. By temporarily stimulating the octopamine receptor, the barnacle larvae’s swimming behavior is activated and the organisms are deterred from the hull. These ground-breaking discoveries enable unrivalled power at very low concentrations, yet within the limits of rigorous risk assessments. Selektope® is an organic, non-metal compound with efficacy proven at 0.1% w/w. For more information visit our website www.selektope.com
This disclosure contains information that I-Tech is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 25-08-2021 08:00 CET.