CyanConnode receives $5.4 million purchase order for smart metering in Bangladesh

This is the Company’s first order for a utility customer in Bangladesh and is a further demonstration of its growing geographical sales footprint. Furthermore, the order size and revenue visibility provided by the long-term nature of this order reflects the Company’s leading position within the smart metering industry in both emerging markets and also in Europe, where the importance of being able to accurately and remotely record data around energy consumption and appropriate billing is uniform.

The $5.4 million purchase order is for the supply of CyanConnode’s Advanced Metering Infrastructure solution for a 150,000 unit smart metering deployment.  The energy management system company, based in Eastern Europe, will integrate CyanConnode’s hardware with its smart meters and shipment to their production facility will take place over the next 12-18 months.

CyanConnode will also provide its Head End Server Software, which will be hosted by the energy management systems customer, with annual software licence income being recognised over a ten year contractual period following successful smart meter implementation. The recurring revenue software licences and annual maintenance contract, which represent 50% of the total purchase order value, will be paid annually in advance and charged on a per meter per year basis.

The Eastern European company has formed a local entity, a new utility that has entered a long-term agreement with the Bangladeshi Government to provide electricity to consumers. The new utility has a consumer base of four million customers, which provides the potential for substantive follow-on orders. The overall number of electricity consumers in Bangladesh is ~58 million. Bangladesh is among four South Asian countries that are struggling due to increasing pressure from rising electricity demand, failure to collect revenue and poor reliability, according to the Northeast Group. Over the next decade, these countries will make significant investments to modernise smart grid infrastructure, particularly in the metering segment. Smart grid investment is projected to total $8.1 billion over the period 2016-2026, with large-scale funding from the Asian Development Bank, the World Bank as well as bilateral aid organisations.¹

John Cronin, CyanConnode Executive Chairman, commented: “We are pleased to announce this significant order from our new partner in a new geographic region. CyanConnode’s collaborative approach continues to deliver a scalable business model, enabling the group to bid for and win business on a global basis with partners seeking highly competitive end to end technology solutions. Furthermore, establishing an end-to-end eco-system supports the transfer of skills and experience, promoting local wealth generation.

“This new partner is a leading smart grid solution provider with ten years’ experience in varied countries including Russia, Eastern Europe and South Asia. We look forward to working with them to integrate our award-winning technology with its market leading smart meters.”

Source ¹ http://www.globalsmartgridfederation.org/2016/07/15/smart-grid-investments-in-pakistan-sri-lanka-bangladesh-and-nepal/

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). This inside information is now considered to be in the public domain.

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