Scenario-based fair value range down to SEK 6-40 (7-45)
Write-down of SEK 57m, as a customer is unwilling to pay
Post close, last Friday, GomSpace announced a FY’22 guidance downgrade, with the outlook revised to revenues of SEK 190m to 250m (previously 264m to 292m – ABGSCe 203m) and an EBIT margin of -90% to -70% (previously better than -15%, ABGSCe -70%). The revision reflects the direct and indirect consequences of a large customer being unwilling (not unable) to pay for extra work that the customer had requested. As such, GomSpace has made the decision to cut its losses and halt all work on the customer’s project, reallocating its resources to other projects instead. Overall, GomSpace estimates a direct financial exposure of SEK 57m, divided into 39m of unpaid invoices and 18m of work in progress.
Cash position is tight, as new strategy needs investments
With a large customer not paying, it is important to highlight that the situation at hand is very different than what happened in 2018 with the sky and space order. Today, the company has a much more diverse and vetted orderbook (~2 years of FY’22 revenues, vs. in 2018 when SAS was almost the entire orderbook) and has not built up special capacity for the customer in question, so it is able to allocate the freed-up capacity to other projects. That being said, the guidance change reflects some indirect costs associated with these changes. We have therefore changed our estimates to reflect the new guidance and the assumption that it will likely cause the margin acceleration to be delayed ~1y. Furthermore, we note that the current cash position of SEK ~83m will likely be stretched in FY’22, especially as the new strategy also requires investments to materialize. We thus expect increased focus on financing opportunities as mentioned in prior quarters.
Bump in the road to deliver on long-term growth strategy While a major headwind,
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