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Highlights:
- Electro Optic Systems Holdings Limited (ASX:EOS), its EM Solutions, has gained and inked a contract with the Australian Defence Force.
- As per the contract, EM Solutions is anticipated to provide and install systems on numerous Royal Australian Navy vessels.
- The contract is valued at AU$149.5 million, with possibilities for additional supply of AU$52.7 million yielding a total contract value of AU$202.2 million.
The Australian benchmark index S&P/ASX200 closed Friday, 19 May 2023, increasing by 0.59% to 7,279.50. One of the companies which outperformed the index was Electro Optic Systems Holdings Limited (ASX: EOS), which ended the day up by 22.602% to AU$0.895.
Let’s find out the reason behind the ASX industrial stock- EOS surge in share price.
The leading Australian-owned and operated defence, space and communications company closed Friday in green after it updated that as a component of SEA1442-5, its subsidiary EM Solutions has gained and inked a contract to deliver and install upgraded communications systems to the Royal Australian Navy.
The Australian Defence Force Project SEA1442-5 was formed to modernise communication throughout the Royal Australian Navy fleet.
As per the contract, EM Solutions is anticipated to provide and install systems on numerous Royal Australian Navy vessels, enabling legacy communications systems to be retired. The deliveries comprise terminals (consisting of the antenna), spares and associated products and services.
The agreed contract is valued at AU$149.5 million, with possibilities for additional supply not to exceed a further AU$52.7 million yielding a total contract value of up to AU$202.2 million. This contract schedule extends for seven years from the current year to the scheduled final acceptance in 2030.
On 12 May, EOS notified it had initiated the commercial launch of a counter-drone product, “Slinger”, at an industry event held in Canberra. It was launched by the Australian Federal Government Assistant Minister of Defence at an event that consisted of representatives from industry and the Australian Defence Force.
The Slinger was developed by EOS for export markets, with an emphasis on addressing contemporary and upcoming threats, based on lessons learned in the latest conflicts like Ukraine. It integrates a radar, and a 30mm cannon, which has exclusively created ammunition, along with EOS’ proprietary stabilisation and pointing technology for counter-drone operations.
The company obtained the initial sale of counter-drone capability in January this year to a US Defence Prime for delivery to Ukraine.
EOS persist in progressing a range of defence technology products. Usually, product development cycles in EOS’ market can be expanded and take up to five years or beyond.
The company continues to discuss requisites in counter-drone technology with prospective clients. Currently, the market for counter-drone technology is developing. EOS thinks that this market has the potential to rise in the upcoming times.
