Q-Free preparing for new projects

108 Q-Free has announced revenues of US$21.11 million during the first quarter 2012 compared to US$29.66 million in the corresponding quarter in 2011, while order intake came in at $44.29 million, $6.45 million more than in previous quarter and $2.96 million more than in Q1-2011, reflecting, the company says, that its general optimism regarding demand is well grounded.

Most important short term is the development in the Jakarta project which Q-Free signed at the end of October, 2011, with PT Rin for the delivery of an electronic law enforcement (ELE) system for Jakarta (DKI) and greater area of Jakarta (Bodetabek). Based on Q-Free's latest tolling solutions, it will be used by the local police for controlling traffic in Jakarta. The purpose of the system is to provide a more efficient system for registration and control of registered vehicles in Indonesia and will improve the efficiency of the local police to enforce stolen vehicles, fake number plates and security related incidents. The potential contract value is some US$167 million for road side infrastructure, operational back office, tags and a service and a maintenance contract for six years. More than half of the contract value is related to delivery of tags.

Although the financing for the project is not concluded yet, Q-Free reports that good progress has been made. 5320 GIEK has approved to give guarantees for the project and 5321 Eksportfinans and Q-Free’s client are currently negotiating the loan agreement. It is expected that this will be signed during May 2012.

The $44.29 million order intake in the quarter is comprised of congestion charging infrastructure in Gothenburg, Sweden, a tag frame agreement with Spanish operator Abertis, AutoPASS contracts in Norway, an access control contract with Brisbane Airport in Australia, a tag order from 3843 Via Verde, Portugal, and other smaller product orders from various markets. The Group’s order backlog totalled US$103.75 at the end of the first quarter 2012 compared to $80.57 at the end of the fourth quarter 2011.

“Our order intake this quarter indicates the high market activity,” says Q-Free CEO Øyvind Isaksen. The company communicated last quarter an addressable opportunity pipeline of US$872 million - $2.62 billion globally for the next three years, and Isaksen says he sees no reasons to revise this. ”We are working on company changing projects and believe it is just a matter of time before breakthrough in new markets.”

The company targeted US$174.42 million in revenue with EBIT level exceeding 10 % for 2012. As the financial close for the Jakarta project is somewhat delayed, the key assumption for the year target is not met. Even so, Q-Free says it still aims to be in the range of the target, depending on kick-off of the Jakarta project in May and conclusion on other projects in the first half of the year.