I-Tech

I-Tech's acting CEO, Magnus Henell present the report live on 23rd of August, at 10:30.
Follow the broadcast: here

Read the full report: here

Summary of the period

” Continued strong growth in turnover and profit ”

Net sales for the first quarter amounted to SEK 42,611 (32,656) thousand, which corresponds to a sales increase of 30 (85) %. The operating profit amounted to SEK 10,172 (7,388) thousand. For the first half year, net sales amounted to SEK 80,881 (63,413) thousand which corresponds to 28 (97)% growth. The operating profit amounted to SEK 19,291 (15,735) thousand.

Significant events April to June 2024

• Sales of Selektope® reached the 20 mt milestone and strong growth in Japan was noted.
• Magnus Henell took office as acting CEO and Markus Jönsson was presented as the new CEO, taking office in the fall.
• I-Tech held its annual general meeting in May. At the meeting, Philip Chaabane took office as new Chairman of the Board after the resignation of Stefan Sedersten. At the meeting, it was decided to re-elect the remaining board.
• The process for a renewed approval within the EU moved from a scientific evaluation phase to a decision phase.

Significant events after the end of the period

No significant events occurred after the period.

Financial summary

CEO Comments

Our growth journey continues, and customers show great confidence in Selektope, which is clearly shown in the quarter’s sales figures. We continue to grow and once again show the strongest quarter to date both in terms of turnover and sales volume. We see this as proof that the product is needed and is an important cornerstone in the shipping industry’s quest to achieve a net zero carbon footprint by 2050.

Sales for the quarter amounted to SEK 42.6 (32.7) million and the operating profit amounted to SEK 10.2 (7.4) million. The turnover reached a new record level for a single quarter while the operating profit strengthened compared to the previous year. The operating margin amounted to 24 (23) %. Considering the first half of the year, turnover shows equally strong growth and amounts to SEK 80.9 (63.4) million with an operating margin of 24 (25) %. Thanks to our scalable business model we manage to maintain profitability at the same level as the previous year, even though we had to increase the costs attributable to the ongoing re-registration in the EU significantly. For the first half of the year they amount to approx. 3.2 (0.9) MSEK, which corresponds to approx. 29 (14) % of the other external costs.

As communicated in May, the re-registration of Selektope within the EU is now entering the next phase since ECHA supported the expert group´s opinion that Selektope should be classified as an endocrine-disrupting substance. In this stage, a public consultation will take place. Throughout this phase, stakeholders like ship owners, shipyards, paint producers and others will be invited to provide their feedback on Selektope, discuss its benefits, and argue for its continued availability in the market. This process is expected to begin by the end of August. We are committed to making a significant investment to bring together all stakeholders and establish the groundwork for continued approval in Europe despite the problematic classification. This is because we believe that the advantages of utilizing Selektope, including the reduction of CO2 emissions, are significant for the European market, even though it represents a smaller segment for both our company and our customers.

Our most significant markets at present are in Japan and Korea, contributing to 35% and 50% of the period’s revenue, respectively. The driving force in Japan comes primarily from being the primary market for our largest customer CMP, coupled with growing market penetration partly due to the introduction of new products in 2021/2022 as well as an enhanced focus on operational optimization and understanding the impact of inefficient protection against barnacle growth.

In Korea, it’s encouraging to note the rise in our sales to PPG, which introduced a novel antifouling product featuring Selektope this spring. The overall growth in Korean sales is largely attributed to the demand for protective solutions during the shipbuilding stage, which was Selektope´s gateway once upon a time, as well as the market’s call for superior long-term protection for vessels constructed there. Concurrently, Selektope is becoming a leading contender in delivering the necessary protection for maritime vessels while adhering to the forthcoming regulatory mandate that caps the contribution of any single biocide to a maximum of 1%. Our view is that it is basically impossible to create a competitive antifouling paint with those levels without including Selektope, which further demonstrates the importance of Selektope and its place in the market.

We have great confidence that the European Commission ultimately will make the wise decision that Selektope should get continued approval for the European market. It will mean continued expansion for I-Tech and Selektope not only in our Asian main markets, but also in the European home market for many years to come.

Magnus Henell
Acting CEO I-Tech