The Electro Optic Systems Holdings Ltd (ASX: EOS) share price is falling lower on Monday despite the Aussie technology company reporting a jump in half-year revenue.
Electro Optic Systems share price falls despite revenue growth
Shares in the space and defence group are falling after the group released its half-year results this morning. Some of the key takeaways include:
- Revenue up 30% on the prior corresponding period (pcp) to $97.8 million
- Underlying earnings before interest and tax (EBIT) before SpaceLink Costs and foreign exchange moves up 85% to -$2.1 million
- Statutory EBIT up 58% on pcp to -$7.6 million
- Statutory diluted earnings per share up 31% on pcp to -8.5 cents
- Operating cash flow of $4.6 million, compared to -$62.6 million outflow in 1H 2020
The EOS share price has slumped lower following this morning's update. That's despite the company noting COVID-19 disruptions weighing on earnings.
What did the 1H 2021 look like for EOS?
The Aussie tech group reported defence segment revenue growth of 25% during the period to $83.2 million. A major overseas contract and Commonwealth of Australia deals continue to underpin group earnings.
Electro Optic Systems' communications (ex. SpaceLink) revenue jumped 60% to $13 million, while space segment revenue surged 126% to $1.6 million.
The defence and space technology company focused on research and development investment during the period but said monetisation and commercialisation are still a "work in progress".
The Electro Optic Systems share price fell 18.5% from 4 January to 30 June. COVID-19 restrictions slowed customer decision making during the year, with the company in "advanced negotiations" with existing customers for more than $1 billion worth of new contracts to be awarded in the next 6 months.
What's next for Electro Optic Systems and its share price?
Electro Optic Systems reported a $2.6 billion risk-weighted sales pipeline for its EOS Defence Systems. The order book sits at $375 million, with 30% domestic and 70% offshore. EOS expects to recognise 30% of the order book as revenue in the current period, with half in 2022 and the remainder in 2023.
The group cited increasing geopolitical tensions and a manufacturing-heavy COVID-19 recovery plan as key positives looking ahead to FY22.
The Electro Optic Systems share price is falling lower on Monday, and is now down more than 32% year to date.
