- DroneShield (DRO) announces an increase in revenue of about 60 per cent over last year
- The company’s 2022 annual report showed revenue of $17 million, with $15.6 million in cash receipts
- The results show DRO is much closer to breakeven, with an 82 per cent improvement to its profit and loss position from 2021
- DRO held orders worth $24 million at the beginning of the year and a pipeline of opportunities totalling $200 million
- DroneShield shares are trading at 33 cents at market close on February 27
Sydney-based ASX-listed counterdrone company DroneShield (DRO) has announced an increase in revenue of about 60 per cent over last year.
The company’s 2022 annual report showed revenue of $17 million, with $15.6 million in cash receipts.
It held $24 million of orders at the beginning of January and a pipeline of opportunities totalling $200 million.
The company recorded a year closer to breakeven, having narrowed its loss position to $949,000 — representing an 82 per cent improvement compared to 2021.
The results were announced as demand for counterdrone technologies has skyrocketed.
DroneShield has been developing its products for close to a decade, from when the drone market was in its infancy and unmanned vehicles were widely viewed as toys.
These days, drones have been deployed for war, terrorism, espionage and smuggling. DroneShield has become a leader in the field with governments around the world seeking its hardware products and software capabilities.
DroneShield CEO and MD Oleg Vornik said burgeoning demand across many applications meant the company was operating in a $10 billion global industry.
“2023 is expected to be a transformational year for the business, as already has been witnessed by two all-time record $11 million orders in December 2022 and January 2023, and a substantial pipeline of opportunities that we are in the process of converting,” Mr Vornik said.
“We have progressed from a concept to developing a suite of products and building a team and a network of distributors in about 100 countries around the world.
“From making the product, demonstrations, to small sales, to repeat smaller sales to large orders — and now large $10 million-plus orders — the future is looking bright.
“DroneShield is the only publicly-listed counterdrone company, which allows investors pure-play exposure to this rising sector.”
Global geopolitical tensions have been running high in the wake of COVID and amid high inflation and recessionary jitters. This has worsened,
- with Russia invading Ukraine,
- by China’s spying activities and aggression around Taiwan and the South China Sea,
- amid North Korea’s ongoing displays of military might,
- and with festering political unrest in Iran, Syria and Afghanistan.
As Russia continues to attack Ukraine, there has been an unprecedented use of drones from both sides of the conflict.
DroneShield was engaged to help Ukraine as small drones were deployed as deadly kamikaze weapons, for dropping grenades, for reconnaissance missions and for directing artillery strikes.
DroneShield’s counterdrone systems work by first sensing attacking drones from a distance as they approach and then bombarding them with radio frequency signals causing them to land or return to their controllers. The drones are not damaged so they can be thoroughly investigated.
Observing the conflict, militaries have understood that they quickly need to build both drone and counterdrone capabilities to combat unmanned warfare.
Many are starting from scratch. Mr Vornik said none has anywhere near the amount of counterdrone equipment they need.
But these military applications are just the start for DroneShield, as unmanned aerial vehicles are increasingly also used for terrorism, espionage and smuggling.
Last month in Brazil, DroneShield’s DroneGun systems protected the Brazilian president Luiz Inácio Lula da Silva against an attempted four-drone attack. Drones had been used in a previous assassination attempt, but this time, security officers were armed with DroneShield’s technology. Counterdrone technology will now be a key tool in VIP security planning.
Governments are paying from US$50,000 to multi-million dollar amounts for counterdrone systems to protect key buildings and sites. They also need the technology to stop drone-powered cross-border drug deliveries, and there’s a similar counterdrone price to prevent the smuggling of drugs, phones and other contraband into prisons.
“That’s significant when you consider that there are more than 3100 jails in the US alone,” Mr Vornik said.
“Each of the world’s 44,000-plus airports is an opportunity for us worth between US$250,000 and $2 million, as is every single energy production and critical infrastructure site.
“Ports need protection and shipping vessels can be equipped with counterdrone technology. Heliports and civilian helicopters are also a market opportunity.
“And event organisers and large stadiums are increasingly budgeting at least US$100,000 for counterdrone systems.”
After raising nearly $11 million through a placement, Doneshield held about $25 million, seeing it well-placed to deliver on existing contracts, growing demand and to keep updating its technologies for the future.
Due to the software required for its systems, DroneShield has a recurring revenue model for its software services.
DroneShield has a market cap above $170 million (on February 27) and shares were trading at 33 cents at market close.