EOS’s turnaround half year sees sales up 98 percent

Defence and communications manufacturer Electro Optic Systems has executed a recovery reporting an underlying EBITDA profit of $11.5 million for the half ended 30 June, compared to an Underlying EBITDA loss of $14.8 million in the previous corresponding period.

The manufacturer of remote weapons systems used in Ukraine reported group revenue of $142.6 million for the half-year, an increase of $68.3 million or 92.0 percent.

The company’s Defence segment doubled to $101.4 million in the half-year while the Space segment increased to $41.3 million.

The Loss After Tax, was $3.5 million compared to a loss of $32.4 million, and net cash outflow from operating activities totalled $30.6 million for the half-year, a decrease of $61.3 million.

EOS told investors: “The underlying driver of these revenue increases was higher activity levels, including continued delivery of a key Defence contract to a customer in the Middle East and activity on the EM Solutions contracts.

“At 30 June 2024, the Group had a backlog order book of contracted work of over $386 million.”

In addition the group has $181 million of conditional contracts with customers in Ukraine.

EOS’s biggest customer is for remote weapons systems to the UAE, while EM Solutions manufacturer satellite communications systems utilised on RAN naval ships.

During the year the company raised $35.4 million, however excluding the equity raising, cash balances decreased by $54.2 million from 31 December 2023, with EOS ending the half with cash totalling $52.2 million.

During the half-year EOS continued contract negotiations in relation to the supply of remote weapons systems (RWS) to Hanwha for the Land 400 Phase 3 Project which will see Hanwha delivering 129 vehicles to the ADF in 2027 and 2028.

The RWS allows soldiers to aim and fire machine guns, missiles and cannon from inside the safety of armoured vehicles, such as Hanwha’s Redback infantry fighting vehicle.

EOS said market conditions supported future gains.

“This is largely due to the ongoing conflicts in Ukraine and the Middle East and rising tensions in other locations.

“This thematic continues to positively impact on customer demand – in particular, the counter-drone market is fast growing and represents a high-profile market opportunity for the group.”

Picture: Dr Andreas Schwer, Chief Executive Officer Electro Optic Systems