Fourth Quarter – Great opportunities, short-term challenges.
The fourth quarter was one of the most exciting quarters during my time as CEO of Sivers IMA. We signed two agreements in important areas that can be crucial for our future growth – a 5G agreement with Ampleon, the world leader in RF for base stations, and an agreement of SEK 21.5 million, for a ‘small’ pre-series order to a very interesting American Fortune 100 company. This means that we managed to secure new, very important business in both our business areas during the same quarter, which is somewhat of a breakthrough.
We still see a very positive development going forward, which is further strengthened by these new contracts, but in this quarter, we have encountered challenges, that however are largely limited to this quarter. In Wireless, our outgoing VCO products that were to be delivered during the fourth quarter. Had to be stopped before delivery due to errors found in a subcontractor’s substrate, this delivery corresponded to approximately SEK 5 million and will instead be delivered during February to May 2019. In the fiber optics area, there is still a trade war in China that create challenges, CST Global has in connection to this market an older stock of GPON chips that now needs to be written-down by SEK 12.3 million. All in all, this means that during the fourth quarter we achieved a lower result than we wanted.
In the fourth quarter, net sales amounted to SEK 16.8 million (SEK 32.9 million), which is a decrease of 49% compared with the corresponding quarter of 2017. The company’s EBITDA result ended at SEK -21.2 million (SEK 1.5 million), which is a decrease of SEK 22.7 million compared with the corresponding quarter in 2017. The result includes a write-down of SEK 12.3 million for the wafer inventories at our subsidiary CST, this one-time write-down accounts for more than half of the total loss during the quarter. Excluding this write-down, the EBITDA result for the quarter would end up at SEK -8.9 million. However, gross operating income for the full year 2018 increased to SEK 119.8 million (95.8), which corresponds to an increase of 25% compared to 2017, while net income increased by 7% in total, to SEK 69.8 million (65.4).
We have a great deal to look forward to, not least that we have products ready in unlicensed 5G (formerly WiGig) as well as prototypes within licensed 5G with a total of nine ‘design wins’ from customers that develop products and prototypes based on our 5G technology. Our American Fortune 100 company customer is also becoming an important part of our growth journey. Regarding the Chinese market around FTTH (fiber for the home), we do not see any improvement in 2019, However, the positive developments for our overall portfolio makes us believe in a good growth.
All in all, we have had a temporary setback, but I am convinced that we will see a good growth already in the first half of 2019. Our new products ensure that we are well positioned for the largest and most important fairs – the optical Networking and Communication Conference (OFC) in San Diego in March and the Mobile World Congress (MWC) in Barcelona in February. At MWC, we will have the largest stand we have ever had, together with our partners Blu Wireless and Fujikura. I look forward to telling you all about this in March.
Anders Storm, CEO of Sivers IMA
Erik Penser Bank is appointed Sivers IMA Holding ABs Certified Adviser on Nasdaq First North.
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This information requires Sivers IMA to publically announce it according to the Market Abuse Regulation of the European Union The information was provided by the contact person stated above to be publically announced on February 15 2019 at 08.30 AM.