Initially used primarily by the military and the average hobbyist, drone technology has been refined for commercial applications. There have been use cases in wildlife conservation, security to conduct surveillance and increasing interest from logistic providers as a courier service. Lately, there has been elevated interest from the mining and agricultural industry in obtaining aerial imagery and map areas.
Global drones-as-a-service provider Delta Drone International (ASX: DLT) has obtained its official drone licence for commercial use – the Beyond Visual Line of Sight (BVLOS) licence, granted by the Civil Aviation Safety Authority (CASA). The approved licence is posed as a significant business opportunity to tender for contracts with existing and new clients that would have otherwise been inaccessible.
A BVLOS operating licence allows for remotely piloted aircrafts beyond line of sight; this is differentiated from the standard Visual Line of Sight (VLOS) licence that limits drone use as it has to remain constantly in the line of sight. The application process for this licence is often known to be stringent and comprehensive; it requires the applicant to construct thorough use-case documentation and operational procedures – only a few companies in Australia have been able to acquire one for commercial use.
“The adoption of BVLOS capability and solutions in Australia is a game changer to many industries on the cusp of benefitting hugely, including in mining and agriculture, which has one of the highest drone penetration rates however operates almost wholly on VLOS only solutions,” said, Delta Drone CEO, Christopher Clark.
“Our strategy and experience in operating BVLOS in other country environments, and now in Australia, puts DLT in pole position to capture opportunity with existing and new Australian clients who are ready to engage in our services, which until now they could not benefit from, and we can now include these services in our tender process.”
Delta has successfully operated BVLOS systems in South Africa in the mining and agricultural sector since 2018 and holds a drone licence that covers the entire country of South Africa. The Company demonstrated relevant safety and compliance procedures while operating there, which laid the framework for acquiring a BVLOS licence to operate in Australia.
Recently, Delta Drones has completed a proof-of-concept with a world-leading spraying company, Hardi Australia, which looks to revolutionise precision agriculture spraying technology. Trials have demonstrated that Delta’s aerial drone data outputs connected to Hardi’s precision sprayers have reduced farm input costs.
The Company initially started making headways in the Australian market in September 2021, when Delta completed a successful acquisition of Arvista that brought in a huge customer base and a solid pipeline for business in aerial & terrestrial surveying. Last quarter, Arvista made up 31% of Delta Drone’s cash receipts and has a healthy outlook for continued growth, with new contracts expected to come into effect during FY22 and FY23.
Currently, Delta serves 18 enterprises, 12 of which were new customers compared to 2020. This customer base lists a few well known companies including Newcrest mines (ASX: NCM), Northern Star (ASX: NST), Regis Resources (ASX: RRL) and South32 (ASX: S32). In June 2021, Delta successfully extended its contract with S32 for an additional five years where the Company will assist the miner with aerial data services.
For the quarter ending 31 March 2022, receipts from customers totalled $1.8m, an increase of 4% from Q4 FY21. Expenses the Company incurred through its normal operations totaled $1.97m, a decrease of $837k on the previous quarter – which was a result from the sale of ParaZero.
Net cash used in operating activities reduced significantly to $132k for the quarter, down from $780k in Q4 FY21 – of which $123k was related to the final net cash flow from the ParaZero sale. In FY21, the Company recorded a revenue increase of 36% from $3.4m to $4.6m.
Currently, DLT shares sit at $0.015 which have fallen 92% from the IPO highs of $0.213 in June 2018.
Trading Desk Assistant at Emerald Financial
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