COMMENTS BY THE CEO
In the final quarter of 2019, OXE Marine achieved record sales of 142 units with net revenues of SEK 40 m, whilst achieving a 10% gross margin translating to a gross profit of SEK 4 m. Effectively, all completed units from production and inventory were sold out. Furthermore, I am confident that following the introduction of the OXE300, our gross margin will begin to move significantly higher. Our key financial objective to become gross margin positive by Q4 2019 has been met. Equally satisfying is the year on year increase in net revenues since we started production in September 2016.
I am also pleased with our order book, for unit deliveries in 2020, already now representing approximately half of our net revenue sales of 2019. I am therefore confident in meeting our 2020 financial target of net organic sales growth of more than 50% year on year. From 2020 onwards our reporting will focus on net revenues rather than unit sales as our product mix will become more sophisticated, which will include a higher percentage of revenues from spare parts, accessories and service kits – a natural increase especially as our OXE125-200 product range matures. OXE Marine has now delivered production units for government services in the US, Australia and Bangladesh – we are also working on various governmental projects which we hope will unlock further long-term sales contracts. The demand from the commercial sector continues to progress as expected, particularly for the OXE200.
Our expected start date of the OXE300 production in May 2020 remains unchanged and we are increasing our planning and execution resources. We will carefully ramp up production during Q2 and Q3, whilst closely monitoring product quality.
With regards to funding, we successfully completed the share warrant exercise as well as a directed share issue totalling SEK 50.8 m in October. Additionally, we have satisfied all conditions to enable us to draw down tranche B of the European Investment Bank (“EIB”) Loan facility of €4 m. Drawdown is expected to be completed in March 2020.
OXE Marine is aware of the coronavirus epidemic and continues to monitor its potential impact on supply chain and sales in the affected regions.
Lastly, you will have noted that the company changed its name in January. One of the main reasons was to create consistency with our product brand. Our strapline “Engineering the Future” also gives an indication of the potential of our technology that will enable us to develop environmentally friendly products such as hybrids and fully electric variants. Additionally, it was an opportunity to develop what our vision, mission and core values are and communicating with all our stakeholders about who we are and what we do, how we intend to execute our mission and what we stand for. We are still a young company but with the collective support from our employees, consultants, customers, suppliers and investors, we will realise the full potential of our disruptive and innovative belt propulsor design.
CEO - OXE Marine AB
At OXE Marine we are driven by the ambition to transform the outboard motor; impacting the journey towards a more sustainable and ecologically positive marine environment. We are passionate, knowledgeable, and reliable. Passionate to commit to innovation and excellence, knowledgeable to recruit and retain high-quality personnel, and reliable to commit to supplying safe, durable, and reliable products and services and to openness and fairness with all our stakeholders. OXE Marine believes in a strong collaborative approach between our teams and partners while being daring and persistent in our passion for excellence. OXE Marine was founded in 2012, and is the company behind a patented outboard transmission, enabling the use of high torque diesel engines on outboard systems and in sterndrive solutions.