Drone engine maker Orbital Corp goes flying as loss turns to profit
Drone engine producer Orbital is back in the black, announcing a $1.8 million net profit after tax as part of its preliminary 2018 results.
Investors loved the news, pushing the shares up 43 per cent to 50c on Thursday. The stock, which is capped at $38 million, has traded between 33c and 68c in the past year.
The Perth company (ASX:OEC) performs engine development and testing for tactical drone units and has offices in Australia and the US. It set up a drone facility at Hood River in Oregon last year.
Its clients include Boeing subsidiary Insitu, for which Orbital designed N20 drone engine to be used in the US military’s ScanEagle drones.
According to the company’s preliminary unaudited results for the 2018 financial year, Orbital has delivered on guidance to hit the $22 million revenue mark.
Earnings before interest and tax sit at $2.3 million for the year, with the company securing a $1.8 million net profit after tax.
In 2017, Orbital posted a $12.2 million loss, with its struggling remote system operation system, REMSAFE, generating a $5.2 million goodwill impairment charge.
Orbital acquired the REMSAFE technology in 2016, but REMSAFE hardware saw lower than expected sales.
The company’s half-year update in February confirmed it had successfully divested from the REMSAFE business for a cash payment of $2.2 million.
At that time, chief executive Todd Alder reaffirmed to investors that Orbital’s key focus going forward would be “transitioning the business into a profitable engine and flight critical component supplier, building a platform for global revenue expansion and increasing profits”.
Over the past 12 months, the share price has fallen 23 per cent to 35c.
Full audited accounts and 2019 guidance are scheduled for release on August 31.