Orbital Corporation Ltd (ASX:OEC) has signed a contract worth A$3.5 million with its major Singapore customer.
The second stage engineering contract follows the initial engine design, development and integration contract signed in 2020 and the successful delivery and acceptance of three prototype engine systems delivered across 2021.
“We are delighted to move this significant programme into the next stage of development,” said Todd Alder, CEO and Managing Director of Orbital UAV.
“With this contract, we now have a clearly defined pathway through to production, representing an opportunity for Orbital UAV to establish itself in a new geography with growth potential in the mid-term,” said Todd Alder, CEO and Managing Director of Orbital UAV.
Orbital UAV signed a Memorandum of Understanding ‘MoU) and initial contract with its Singapore-based customer in March 2020 for the design, development and production of multi-fuel UAV engines.
As outlined in the MoU, both parties have now agreed terms and conditions for the next phase of the program. The Design & Development and Verification & Validation contract signed will see Orbital UAV conduct further engineering work and deliver three additional prototype engine systems during financial year 2023.
Subject to the successful delivery and acceptance of the work outlined, the parties have agreed a timeline for the delivery of production-quality engine systems beginning in financial year 2024.
“This contract demonstrates the material progress we have achieved with our prestigious Singapore customer and our broader customer diversification strategy. We look forward to delivering this phase of the programme over the next 12 months and taking the next step towards production,” said Mr Alder.
The latest contract is effective from July 2022.