Results Update of Three Drone Technology Stocks - DRO, UUV, OEC

  • Feb 28, 2020 AEDT
  • Team Kalkine
Results Update of Three Drone Technology Stocks - DRO, UUV, OEC

A drone, also known as an unmanned aerial vehicle (UAV), is amongst the emerging technologies that are controlled either through a remote or through software. Earlier, when someone talked about drones, it was perceived as being associated with the military. However, times have changed, and the scope of drone technology has also broadened.

Drones have crossed the threshold of being used only by the military people, and now their application could be seen in industries like agriculture and healthcare. As per one of the reports of Australian Trade and Investment Commission, by 2022, the global uptake of drones in these industries is anticipated to fuel the growth of the global unmanned aerial systems (UAS) market.

In the time frame of 2015 and 2022, it is expected that the global commercial market in unmanned aerial systems would increase from US$4.01 bn to US$5.04 bn as per the report by Frost & Sullivan.

According to the Australian Trade and Investment Commission, Australia is well-positioned to benefit from this market. In Australia, there more than 1.2k drone operators engaged in the development of technologies as well as services that assist the broader drone ecosystem.

In this article, we have considered three ASX-listed stocks engaged in the drone technology business. These companies have declared their financial results. Let’s dig in and see how these companies have performed.

DroneShield Limited (ASX:DRO)

DroneShield Limited is a major player in drone security technology that has developed drone security solutions to safeguard people, organisations & critical infrastructure from the drone intrusions.

On 27 February 2020, the Company released its FY2019 result for the period ended 31 December 2019. Following are the highlights from the period:

  • Revenue from the continuing operation increased 200% to $3,617,488 as compared to the previous corresponding period ($1,207,203).
  • Net loss attributable to the members increase 21% to $7,695,080 (FY2018: $6,733,650).
  • Total customer cash receipt for FY2019 was $3,162,838 and is the highest cash receipt till date. The cash receipt was 2.5 times the cash generated in the previous year.
  • DroneShield raised $10,849,696 through share placement. The fund raised would support the rollout of its product suite, as well as extensive R&D.
  • The Company closed numerous sales opportunities that were developed earlier and established various other sales opportunities. DRO also continued to progress various near-term sales opportunities developed previously, with the DRO’s near-term high confidence sales pipeline projected to stand at more than $80 million.
  • DRO won three deals with the Australian military plus orders from various other clients globally and across several industry verticals.
  • During the period, the Company released numerous new products as per the request of the end-user. The products included DroneGun MKIIITM, RfPatrolTM, RfZeroTM, and DroneSentry-XTM, among others.

        DRO's Product

  • In 2019, there was a rapid growth in the application of the drones for terrorist activities. Among these activities was the drone attack by the Houthi rebels on a major oil facility in the Kingdom of Saudi Arabia in September 2019.
  • The Company announced several vital partnerships during the period. The most recent collaboration was with BT during September 2019, which provides a robust platform for adoption as well as the distribution of the Company’s products across various Government & commercial customers in the United Kingdom. Other critical partnership includes Bosch, Collins Aerospace and Saudi Telecom.

 

DRO shares were trading at $0.140 on 28 February 2020 (at 03:30 PM AEDT), a decline of 12.5% compared to the previous day’s closing price.

UUV Aquabotix Limited (ASX:UUV)

UUV Aquabotix Limited is an underwater robotics player that offers leading-edge, flexible use man-machine teaming solutions to counter continued, growing, & developing security threat.

On 27 February 2020, UUV Aquabotix Limited announced FY2019 results for the full year ended 31 December 2019. Below are the key highlights:

  • During the year, UUV, along with its US subsidiary Aquabotix Technology Corporation, gained traction via several achievements with key customers & marked growth towards stated strategic goals.
  • During the period, the Company secured 4 United States Armed Forces funded deals, 2 for development related to the SwarmDiverTM product and remaining two for hardware to assist test & assessment activities to be carried out by the military.
  • Apart from this, the Company received the first international order for SwarmDiverTM from a significant Asian military agency allied with Australia as well as the US.

SwarmDiver

Key financial highlights include the following:

  • Revenues from ordinary activities during the period increased by 108.5% to $322,166 (FY2018: $154,494). The growth was driven by the revenues generated from the new military-funded contracts in 2019.
  • Loss for FY2019 was down 50.2% to $2,409,264 (FY2018: $4,833,146). The loss during the period was because of the impact of the management restructure during 2018 plus the implementation of new strategic focus which resulted in a significant rise in customer funding & severe drop in cash used in operations.

 

UUV shares were trading at $0.001 on 28 February 2020 (at 03:30 PM AEDT), a decline of 50.00% compared to the previous day’s closing price.

Orbital Corporation Limited (ASX:OEC)

Orbital Corporation Limited offers integrated propulsion systems & flight critical parts for tactical unmanned aerial vehicles (UAVs).

On 27 February 2020, the Company, released its 1H FY2020 results (period ended 31 December 2019). The highlights are mentioned below:

  • Total revenue from continuing operations increased by 412% to $11.405 million as compared to the previous corresponding period (pcp).
  • Net loss from continuing operations after tax was $2.518 million, a drop of 37% on pcp.
  • During the period, the Company focused on the deliverables set out within its Long-Term Contract with its important client Insitu Inc, which is a 100% owned subsidiary Company of The Boeing Company.
  • The first propulsion system as per the agreement is in production. The development work focused on the second engine model that was designed by Insitu. Production of the second engine is taking place at OEC’s purpose-built production facility that is in Hood River, Oregon, the US.
  • Orbital Corporation continues to improve its alliance with Insitu. During October 2019, the Company declared a flight-testing program with Insitu Pacific.

 

Outlook:

  • At present, the Company is focused on the development of the third engine. The development forms a part of the contract between the Company and Insitu LTA.
  • In FY2020, the Company expects its revenue guidance to range in between $25 million to $35 million and a positive long-term outlook.

 

OEC shares were trading at $0.410 on 28 February 2020 (at 03:30 PM AEDT), a decline of 7.865% compared to the previous day’s closing price.


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