Company Closes CA$60 Million Deal For Drone Inspection

Volatus Aerospace Corp. (VOL:TSX; VLTTF:OTCQB) has announced in a press release that the company has closed a contract regarding the inspection of the company’s drones and associated infrastructure. The company reports that this deal will last for three years, and its worth is estimated to be up to CA$60 million. The deal is focused on the company’s involvement with oil and gas lines, as well as electrical infrastructure, Volatus stated.

Rob Walker, the COO of Volatus Aerospace, weighed in on the deal: “In 2023, we’ll inspect over 10,000 T&D structures for various utility clients. Starting January, 2024, we will add work on the West Coast and anticipate inspecting upward of 25,000 structures in North America, more than doubling this year’s volume.”

Glen Lynch, the CEO of Volatus Aerospace, commented “What makes this announcement particularly important is the timetable for the execution of these contracts. Q1 is typically a seasonal quarter for Volatus, due to the winter weather in Canada and Northern U.S. These contracts are being flown in regions that will enable us to launch early in Q1 of 2024, generating material revenue during  a traditionally slower time for drone services.”

13.9% Market Growth by 2030

Grand View Research reports that the market for commercial drones is expected to grow by approximately 13.9% by 2030 from its US$19.89 billion market size in 2022. According to Grand View, innovations in the field such as microcontrollers and advances in electronics and computing are driving the market forward. Grand View stated that rotary blades made up the majority of the revenue for the market, at about 79%.

According to Statista, the drone market size was about US$4 billion this year, and China makes up the largest market for drones worldwide at US$1,394 million. Commercial drones, Statista says, light drones weighing under 5kg, and hobby drones are a major focus of the market. Statista estimates that the market will grow by approximately 3.20% each year.

Potential 257% Return

Rob Goff of Echelon Capital Markets reviewed the company on August 29 of 2023, where he rated the company as a “speculative buy” for potential investors. Goff also named a target price of CA$0.75 per share, representing a potential 257% return for investors. Goff highlighted the company’s strong financial performance, where it brought in CA$8.7 million in revenue, increased its working capital, and added a revolving line of credit of CA$2.25 million, as drivers of his positive rating.

Earlier that month he wrote another positive review, and noted that the company’s new product, iRed Remote Sensing, has given the company a foothold in the UK market.

Catalysts for Volatus include the company’s closing of a deal to acquire an adjacent company, Skyscape, and the company’s future goals to increase its presence in the American market.

Ownership and Share Structure

Reuters has provided a breakdown of the company’s ownership and share structure, where management and insiders own approximately 70.77% of the company. According to Reuters, Chairman Ian Alexander McDougall owns 31.75% of the company with 39.02 million shares, and President and CEO Glen Lynch owns 31.29% of the company with 38.46 million shares.

Management and insiders own approximately 0.49% of the company with 0.60 million shares in the form of Palos Management Inc, stated Reuters.

Reuters reports that there are 122.91 million shares outstanding and 45.43 million free float traded shares, with a market cap of CA$15.3 million and it trades in the 52 week period between CA$0.15 and CA$0.44.

Important Disclosures:

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Volatus Aerospace Corp.
2. Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
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