Update on Delayed Indian Contract for 430,000 Omnimesh Modules
CyanConnode Holdings plc (AIM: CYAN), a world leader in Narrowband Radio Frequency (RF) Smart Mesh Networks, is pleased to announce that a substantial Indian contract relating to two projects, which had been delayed, has now received the necessary approvals to resume the implementation.
In September 2018, CyanConnode announced an order for the Indian Utility, Jaipur Vidyut Vitran Nigam Ltd (“JVVNL”), for two projects worth over INR 1 billion. The order is for Omnimesh communications modules, perpetual software licenses, installation services, together with a support and maintenance contract for an initial period of five years, and results in CyanConnode’s largest deployment covering more than 430,000 Omnimesh-enabled smart meters for a single Indian Utility.
During 2019 and in its interim results reported on 31 March 2020, the Company announced that the JVVNL contract had been delayed, thereby causing revenues for the period ended 31 March 2020 to be significantly lower than had been forecast. CyanConnode’s partner for these projects has confirmed to CyanConnode that it has received the necessary clearance letter from JVVNL and that the implementation for both projects can now resume.
Revenue of INR 113 million was recognised against the contract during 2018, and the Company now expects most of the remaining revenue for the implementation phase, (approximately 70% of the contract value), to be recognised within the next two years. The remainder of the revenue will be recognised during the five-year support and maintenance contracts.
On 31 March 2020, CyanConnode updated the market on its response to threats caused by Covid-19 and measures taken to mitigate its impact. Further steps have been taken to reduce the Company’s cost base and the Board continues to reduce and minimise the effects caused by Covid-19.
While all employees in all jurisdictions continue to work successfully from home, the Company has put in place a strict social distancing policy and is following all UK Government guidelines. The Company remains fully operational and due to the quality and flexibility of its staff, the impact resulting from the lockdowns has been minimal.
CyanConnode’s also confirms that its Thai contract continues to meet project deliverables and that payments were received from the customer at the end of March and May 2020, in line with expectations.
Anil Daulani, CyanConnode India CEO and MD, commented:
“We are delighted to receive the approval to move forward with this significant contract, to further showcase the benefits of CyanConnode’s award winning Omnimesh technology. We are really looking forward to working with our partner to provide major benefits to JVVNL.”
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