As militaries beef up their tech capabilities, unmanned aerial vehicles (UAVs), or combat drones, have come out as an attractive choice, thanks to the reduced risk to human lives and optimal targeting.
In keeping with that, Perth-based UAV (unmanned aerial vehicle) components developer Orbital Corporation (ASX: OEC) has recently inked a lucrative deal with defence organisation Finance International PL, worth approximately $1.1 million. The contract encompasses the manufacturing and supply of heavy fuel engine systems, spare parts, and in-service technical support to the new client. These are scheduled for delivery in H2 FY24.
The CEO and Managing Director of Orbital, Todd Alder, commented, “Over the past 10 years, Orbital UAV has built an enviable position as a world leader in the design and manufacture of engine systems for tactical UAVs. This latest order for our heavy fuel UAV engines demonstrates the growing reputation of our established product range and continues to expand our global customer footprint.”
The contract entails the provision of several engine systems to be integrated into the Finance International’s tactical UAVs. Notably, these engines will feature Orbital UAV’s proprietary FlexDI direct injection fuel system and FlexECU engine control unit, incorporating patented technology that ensures exceptional performance when operating on the military’s preferred kerosene-based fuels, JP-5 and JP-8.
FlexDI technology offers advanced Spark Ignition solutions for UAV engines, accommodating various fuel types such as Gasoline, JP5, JP8, and JetA. On the other hand, the FlexECU platform has been developed to deliver robust and high-quality engine controllers, tailored to meet the diverse requirements of modern engine applications.
Alder added, “We continue to witness the increasing strategic significance and growing demand for tactical UAV capability around the globe, and particularly the Asia Pacific region. Within APAC, several nations are exploring or developing their own sovereign capability in the tactical UAV domain. The military requirement for equipment to run on JP-5 or JP-8 fuels ensures that Orbital UAV’s unique patented technology continues to offer a significant advantage in the supply of superior propulsion solutions for this type of application.”
Orbital UAV’s consolidated revenue for H1 FY23 amounted to $12.7 million, reflecting a notable 42% increase compared to the corresponding period in 2021. The Company’s revenue comprises sales income from established engine production lines, engineering services income from development programs across Orbital UAV’s expanding customer portfolio, and a $2.4 million settlement claim with Insitu, the Company’s largest customer and a wholly-owned subsidiary of the Boeing Company.
In addition to this recent contract, Orbital UAV has successfully delivered the initial prototypes for the second engine program in collaboration with Textron Systems, one of the world’s leading suppliers of tactical unmanned aerial vehicles (TUAVs).
All manufacturing operations related to the contract will be carried out at Orbital UAV’s Perth facility in Western Australia. Payments for the contract will be recognised in FY24 upon the successful fulfilment of technical and delivery milestones.
Alinda is a Business Reporter for The Sentiment
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