Interim Report 1 January - 31 March 2020
20 May 2020
Interim Report 1 January – 31 March 2020
Risk Intelligence A/S (“Risk Intelligence” or "Company") hereby publishes the Q1 2020 Interim Report for the period 1 January – 31 March 2020. The report is available on the Company's website (www.riskintelligence.eu).
Highlights
Risk Intelligence had a growth in revenue of 16% in Q1 2020 to 3.7m DKK
Risk Intelligence System recurring revenue amounted to 93% of total revenue in Q1 2020
The renewal rate in Q1 2020 was 98%
Known revenue for 2020 as of 31 March constituted 14.2m DKK.
The Company signed its first LandRisk license agreement.
The Company signed an agreement for the Risk Intelligence System with one of the biggest shipowners in the World, the NYK Group in Japan.
Reporting period Q1: 1 January 2020 – 31 March 2020
Revenue: TDKK 3,708 (3,200) +16%
Earnings before interest, taxes, depreciation and amortization (EBITDA): TDKK –1,930 (-2,368) +18%
Earnings before taxes (EBT): TDKK -2,666 (-2,796) + 5%
Profit/loss for the period: TDKK -2,081 (-2,181) + 5%
Earnings per share: DKK -0.25 (-0.28)
CEO statement
Risk Intelligence has reached a satisfactory result in Q1 2020 considering the challenges that have impacted globally. The 16% growth in revenue in Q1 2020 is significant as it was derived in a very difficult business environment of increasing uncertainty especially during February and March due to the impact of COVID-19 on both clients, potential clients, partners and our providers.
Following the significant investments in 2018 and 2019, the original plan was for Risk Intelligence to deliver on its growth targets in 2020 and to double the original maritime revenue compared to 2017 and add substantial new revenue for the new business area of landside logistics and transportation. The year started with a 204% growth in revenues for January compared to January 2019 and signs for still positive increase in growth for 2020. However, this was followed by a 51% decrease in revenues in February, when the impact from COVID-19 started in Asia and elsewhere and then by a more modest 9% decrease in March.
In Q1, and slightly better than expected, earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 18% to TDKK -1,930 compared to TDKK -2,368 in Q1 2019. Earnings before taxes increased by 5% in the period. Q2 is planned with a negative EBITDA and under the current budgetary assumptions Q3 and Q4 are planned with positive EBITDA and subsequently a positive EBITDA for the full year.
With the signals of a more challenging business climate we already in February initiated a revision of the budget for 2020 with a significant reduction in revenue as well as significant cost savings into a new budget that is still balanced with a planned positive EBITDA under the current assumptions. The budget still aims for an increase in growth compared to 2019, but at lower rate than originally anticipated. With the current known revenue of 14.2m equal to the total revenue of 2019 there is a solid basis for growth.
Our production has been running without any interventions all the time, as our teams are able to work remotely already. Our Duty Watch Team has been monitoring the situation 24/7, even if was from their homes in Copenhagen, Washington DC, Vancouver or Singapore. The criminals, terrorists and other armed groups around the World have not been decreasing their activity and as an example in Q1 there were 34 cases of maritime crime in West Africa, where six were serious cases of kidnap for ransom from ships.
We believe, that while April almost came to a standstill for many businesses, we can see an uptake in business activity during May, where existing contract negotiations have been renewed and new ones have been initiated. One of new the drivers in our relationship building with both existing and potential clients during COVID-19 has been the launch of our webinars, which have been very successful, and have covered many different aspects of maritime security as well as planned ones on maritime and landside security.
It is obvious that a situation such as COVID-19 demands new ways of interaction within companies and between companies and their clients. It is also a time where it is possible to turn the crisis into an opportunity and promote rapid change in a way that is not always possible. This means more attention to digital solutions and this plays well into our existing model of delivering our analysis and assessment, to support our clients’ decision-making and thereby improving their general and specific security posture.
Hans Tino Hansen, CEO
Capital Resources
The Company’s cash policy is at any time to have enough cash to run the company for a period of 12 months according to plans and initiatives decided upon. As part of this policy the company in April has got a 2m DKK credit facility at Danske Bank supported by a financial guarantee by Vækstfonden.
Due to the planned negative result in 2019 and in Q1 2020 the equity is at end March 2020 close to zero. The Board of Directors will take the necessary steps to re-establish the share capital to full fill the requirements in the Danish Companies Act.
Acquisition of shares
Hans Tino Hansen, CEO, has acquired 10,000 shares in the market in the period early March to end April with an average weighted share price of 3,01 DKK.
For more information about Risk Intelligence, contact:
Hans Tino Hansen, CEO
Jens Krøis, CFO
Telephone: +45 7026 6230
E-mail: investor@riskintelligence.eu