Today, I'm pleased to present CEO, Per Norén. Please begin your meeting.
Thank you so much, Sarah. Thank you so much, Sarah. Warmly welcome everyone to this extra call upon webcast. The information that we, the company, Ovzon, sent out on Friday evening, February the 3rd with regards to reschedule of the launch of Ovzon 3, secured additional financing and also our preliminary 2022 Q4 and full year numbers. I have with me here this morning, Noora Jayasekara, who is our Chief Financial Officer. Welcome, Noora.
Good morning.
Good morning. As Sarah, the operator said, we'll go to questions and answers at the end of the session. I think without further ado, we will welcome everyone. Appreciate that everyone participates, and we'll move through our presentation. We will start with the big task at hand, obviously, with the scale Ovzon 3 and the switch from Arianespace to SpaceX as the launch provider.
Let me talk a little bit about that. First of all, as you know, we have unfortunately had to delay the Ovzon 3 construction and production of Ovzon 3 previously. Mostly, frankly, due to COVID, which we most often kind of almost forget about, and also some supply chain issues with regards to that.
One of them being the industry-wide issue that Honeywell had with what's called reaction wheels that actually affected about 70 other satellite programs outside of the Ovzon. Since then, we've had good progress with the satellite. We've been working very closely with Maxar to find efficiencies. We've added additional resources to accelerate the production and regain some of the time that we lost in previous delays.
We've also taken the, or Maxar has taken the satellite through what's called thermal vacuum test with strong results. We're through that now. Despite that, the Maxar has encountered and we've concluded with them, the extra efforts will not have the satellite ready for the launch we had informed about, which will September to February 2023. December 2022 to February 2023.
Which meant that Arianespace could not accommodate a launch after that date. That meant that when we were informed of that we couldn't meet that timeline, we worked with Arianespace to see if they could launch us somewhat later in 2023, which they couldn't accommodate.
We immediately turned to SpaceX, and in a very short period of time, negotiated a contract where they can accommodate in the time window of July to September 2023. You could say that the delay of the satellite is a combination of production and finding the right launch window overall. Part of this also means that there is an increased cost for the total program with approximately $25 million.
We'll come back to what that means to us and what we've done to secure the ability to actually conclude the product and launch the satellite. I also wanna make sure that everyone understands the satellite will be operational.
It can be used for customer service circa 4 months after the launch, and that we definitely see a continued strong demand and interest from the market and our customers for the unique capabilities and technology, including our On-Board Processor, et cetera, that we offer the market as also. That's basically the foundation of why a delay, how a delay, what it means, what we've done, and then move to a different launch provider, in this case, SpaceX.
I will now hand the word over to Nora, that will talk a little bit about the additional financing arrangements that we've done to be able to conclude of the Ovzon 3 program. Over to you, Noora.
Thank you, Per. Turning to slide 4. As Per stated, we have estimated the increased costs in the Ovzon 3 project to approximately $25 million. To secure financing, we have agreed with P Capital Partners to amend the existing loans million US dollars to $65 million. Ovzon has currently drawn $45 million from the facilities, and with the amendment, we have made additional $20 million available.
In addition, we have confirmed interest from several major shareholders to participate issue. Ovzon has engaged Carnegie Investment Bank as financial advisor, and we will provide more information in the near term. We are happy to have such committed shareholders and pleased with the good collaboration with P Capital Partners. Back over to Per for Ovzon's performance in the fourth quarter.
Thank you. Before we go there, I also wanna say a few words about this. Obviously, we're not. It is not an easy task to actually communicate further delay. As I hope we have understood now very swiftly, as quickly as we understood that the production wouldn't be fully in place for the first launch, we had an increased cost.
We needed to switch launch provider and secure the financing in order to conclude the project. We've taken extremely strong and decisive measures. Now over to the business. First of all, I would say we've had a record Q4. We have never had such a strong fourth quarter in the history of the company. We grew net sales with 38% compared to Q4, 2020. We improved our operating profit as well.
Noora will come back to that. The net, the improved operating profit is because we've been able to, in Q4, utilize all contracted satellite capacity in an optimal way, and we've built up inventory of mobile satellite terminals that we had. That has had an effect on the bottom line, obviously.
From a business perspective and market perspective, there are some significant things that happened in Q4. We did renew the 12-month contract, another 12-month contract that had been with us for many years, the United States Department of Defense, with $16 million over the 12 months. Maybe the most significant thing was also outside of that we have new customers in new geographies, such as in Sweden, through our partner, Swedish Space Corporation, as well as in France, through our partner, Nigma.
For those of you that remember, we also signed through a new partner in Q3, called GRC in the UK. We've really taken big steps towards that. all signed with through our Spanish partner, Aicox, for civil defense in Spain. We've had quite a strong business in Q4, and it continues, continued in January with the signing of, our, a Spanish customer. Noora, maybe you would wanna just make some remarks on the actual numbers.
Thank you. As Per mentioned, we had strong net sales that amounted to SEK 101 million with a growth of 38% in the fourth quarter. Our operating profit reached minus SEK 9 million, improvement from the minus SEK 29 million in the fourth quarter, 2021. For the full year, 2022, our net sales amounted to SEK 357 million, with a substantial growth of 87% compared to previous year. Operating profit was SEK 47 million, also an improvement from the minus SEK 113 million in 2021. Per will now provide you with some closing remarks.
Thank you, Noora Jayasekara. Yes. I think the business is operating very solid. We had a strong year, strong fourth and Q4 as it's at, and we had a strong full year in the preliminary numbers we've now given you. I will close the remarks, and we'll go to questions and answers, obviously, with some of the following statements.
First of all, our core business is not dependent on the capacity of Ovzon 3. We today have access to satellite capacity, both that we have contracted and that we've utilized very efficiently in Q4, as well as new, if needed for expansion, in new geo customers, with current customers.
We're the only provider in the world with a SATCOM integrated, fully integrated SATCOM-as-a-Service, as can be depicted on, seen on this picture, with a control over our mobile satellite terminals and the performance and mobility and resiliency of that. Strong management of networks, secure, strong gateway capabilities, connectivity to fiber and the Internet, obviously, and a 24/7 customer support.
Others are doing this, but they mix and match to get this. We manage this on our own. With on Ovzon 3. Lastly, I would say the following, our vision has not changed. Our mission is to connect the world's critical missions via satellite. We're focused on customers with high demands and operational needs, such as in defense, military defense, and civil defense, protection, emergency services, NGOs, and other markets.
Today, we base our SATCOM-as-a-Service on leased satellite capacity. Soon, we will have both our own with our first industry leading Ovzon 3 satellite and related technologies, as well as a mix of that with acquired satellite capacity. There is not a shortage on the capacity we need when we need it, so it will not have an effect on our current business and service delivery.
We continue to realize our vision of owning a number of orbital slots and then continuing to build up a fleet of our own satellites. First comes first, it's very important, and this is where we have our focus now. It remains on launching O3 at the earliest possible date.
We're very pleased to have been able to get SpaceX to commit to work with us as well, so that we can do that as quickly as possibly can after the production of the satellite. Our vision remains, our mission remains. Today is not dependent on it, but of course, our main focus is to finalize the satellite O3 and continue to grow the business further. With that, we'll hand the word over to our operator, Sarah, again, and we are prepared to answer your questions.
Thank you. Ladies and gentlemen, if you do have a question for the speakers, please press star one one on your telephone keypad to register for a question. Once again, that was star one one to register for any questions. One moment whilst we wait for our first question. Our first question comes from the line of Simon Granat from ABG Sundal Collier. Please go ahead. Your line will be shortly open. One moment whilst we open Simon's line.
Thank you, operator. Hi, Per and Noora. Hope all is well, and thank you for hosting this session, given recent news. A couple of questions from me. Initially, could you break down the $25 million in extra cost? Or perhaps if that is not possible, is it that is not the case, maybe you can mention if it relates to the previous SEK 1.5 billion in CapEx guidance. Thank you.
Noora.
Good morning, Simon. The $25 million increase is mainly play the reach in launch provider. Obviously some other costs are also incurred due to the delay. The $25 million needs to be added to the previously communicated $1.5 million.
Thank you. That is very clear. During Q4, we have also read some news from the Cyprus regulator, or we have re-read some of it in the newspaper. Any update or any color you may add on this?
Yes. Thank you. Good morning, Simon. Yes, I'd be happy to answer that. as with all in the regulated markets, so to speak, the so-called the International Telecommunication Union, so-called ITU have a regulatory review board that reviews all orbital slots and how you bring spacecraft into orbit and in position, so to speak.
It's a very formal process. We have, due to the delay, asked for an extension of that for our bringing into use. They have not, they have in the first instance said, fair enough, we need some more information on that, because we've referred to delays, COVID, supply chain issues, et cetera, et cetera, which actually is what we've gotten from our production partners. They've asked for additional information.
We are working on answering them that. They have their next meeting in March. We're working on answering that, and we're working collaboratively with Maxar because we need information from them. We've taken on some experts in the field, consultants, to help us get the full package there for the meeting of the reg for review in March this year. It on one end, it's a very re-regulated and normal process.
On the other end, they wanted more information, which is actually well understood. It's a bit hard to predict, but we do not actually should be an issue for us, given that we now have a launch through SpaceX in the time window we have, and we've asked for an extension that would fall well into that time window. That's where we are with that.
Thank you, Per. That's very helpful. Then going into the Q4 performance, certainly that is very strong such. You mentioned that all capacity is currently being utilized. Given recent momentum, is it possible for you to untap more capacity throughout 2023?
Absolutely. Just to be very clear about Q4. Most of the capacity that we have acquired were used in Q4 and continues to be used start of this year, right? There is more capacity that we can acquire from several satellite operators within our band, we don't see that as a limitation for us, should we be able to conclude and sign new customers or expand with current customers. We are not limited by satellite capacity today for sales and service delivery.
Great. interesting to hear. Given recent orders, you continue to broaden the customer base. Is this still a focus area as we go into 2023? Could you talk a little bit on the balance, essentially between broadening the client base on going for more for existing customers? Thank you.
Absolutely. I think the core for Ovzon has always been, our core customer base, right? The United States Department of Defense has been a core customer for many, many years and continues to be. We have served them well, and we've worked very closely with them. Current base of customers is our number 1 priority. We usually call this the stairway to heaven. Secondly, it has been important for the company not to be dependent on their 1 customer.
With the expansion that we had with the Italian Fire and Rescue Service and now taking staff both through what I call GRC, which is our partner in the U.K., as well as now with Sweden, with our partner, Swedish Space Corporation, and also with the French partner, Nigma, and now in January, Aicox, for a test installation in Spain.
It is actually a focus for us to broaden and with brand new customers, not to have dependency in our revenue and earnings base only from one customer. We will continue that. The critical aspect of why we are actually improving so well as we are and have such a strong Q4, is because we are able to sign an agreement and then quickly turn on that service, which means we can invoice and get revenue for that service that we have.
Our service and support organization and delivery organization is very important. Adding that the industrialization we did during 2020 and 2020, getting our mobile satellite terminals built up and we can have an inventory of terminals and we can deliver on the needs that we have in the market for integrated services has been very important.
It's a longer answer than you wanted, Simon, but that is key. We were dependent on one customer, we're not anymore. It's still an important customer. In this, I almost like an avocado. The kernel is the core customers and then the meat outside of that, we're trying to add more and more of that with new geographies and so on. As you can note, we're not spreading thin over Asia, Pacific and other places. It's basically and in Europe for the moment that we concentrate our efforts.
Thank you for all the insights. That's all for me. I'll go back into the line. Thank you once again for hosting this session.
Thank you, Simon. Thank you. No problem.
Thank you. Once again, if you would like to ask an audio question, please press star one one on your telephone keypad to register. It is star one one to register for any audio questions. There are currently no more audio questions registered.
Okay. Well, let's conclude. Thank you, Sarah, for helping us arrange this webcast. Thank you, Nora, for participating. Thank you to all of you that listened in. We absolutely determined to finalize Ovzon 3 and launch it. We're very pleased to have been able to sign with SpaceX, as I said. We're very pleased with being able to have the support from P Capital Partners.
We're pleased with the, of course, with the long-term support we have from our shareholders. We look forward to actually the day when the satellite is up, obviously, as all of you do I know. Again, I'll underline, we're not dependent in the core business today on Ovzon 3. We have capacity and we have capability to deliver on that going forward. With that, Sarah, I think we'll close the meeting and, thank you everyone again.
Thank you. This now concludes our conference. Thank you all for attending. You may disconnect.