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Orbital Corporation (ASX:OEC) signs initial contract and MoU with Singaporean defence company

Industrial
ASX:OEC      MCAP $14.60M
19 March 2020 13:30 (AEST)
Orbital (ASX:OEC) - Managing Director & CEO, Todd Alder

Todd Alder/LinkedIn

Unmanned Aerial Vehicle (UAV) parts manufacturer Orbital Corporation (OEC) has inked a deal with a new international customer.

Orbital has signed a binding Memorandum of Understanding (MoU) to design, develop and produce multi-fuel engines for a major Singaporean defence company.

An initial contract has been signed with the company for Phase 1 of development which is expected to take up to 18 months to complete. This will entail the development, integration and supply of a first prototype to the customer.

Subject to the success of the initial prototype and acceptance from the customer, the MoU provides for subsequent contracts for a further two phases.

Phase 2 of development would see Orbital supply additional engines for the customer to conduct more evaluations. The third and final phase would include a low rate production run of the multi-fuel engine.

Activity at Orbital UAV’s facilities in Australia and the USA. Credit: Orbital Corporation

CEO and Managing Director Todd Adler welcomed the contract as an opportunity to demonstrate the company’s techniques with a new international customer.

In addition, the company clarified that the contract for Phase 1 will not alter its revenue guidance for the current financial year.

Shares in Orbital are trading 5.95 per cent higher for 44.5 cents apiece at 12:20pm AEDT.

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