Seven Covid days hit EOS hard

Space, communications and defence manufacturer Electro Optic Systems experienced a horror last Covid-19 seven days to the second half of 2020.

The Canberra company reported major disruptions to its supply chain in the last week of June interrupted product delivery and delayed revenues until later this year.

The half year result was a loss after tax of $14.3 million, nonetheless revenue was up 31.3 per cent to $75.4 million.

EOS said a Covid-19 lockdown had broken the company’s product delivery chain in a number of places for a ‘major delivery project’.

The company did not say which contract was affected, but the effect is possibly large, as EOS is busy on contracts for its remote weapons systems for armoured vehicles worth as much as $450 million.

It did say that that during the half three staff at the company’s UAE facility and one in the United States tested positive for Covid-19, necessitating other staff to isolate. All have recovered and returned to work.

It is not known if the supply chain interruptions affected the $450 million UAE contract.

EOS told investors: “The company assessed that the recovery of the entire delivery chain would take 60 days after reasonable access and mobility was restored.

“Since access was forecast to be opened from September, the earliest date for deliveries to commence would be October, pushing cash receipts to Q4 2020.”

EOS raised $138 million in new capital during the year and is in a strong position with $128 million in net cash.

A total of $55 million has been allocated to expansion of inventory needed until production capacity can be switched to other contracts with no delivery impediments.

Picture: Electro Optic Systems

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