France-based drone manufacturer Parrot has released in first quarter report for 2018, with a positive outlook despite continuing losses.
The company first saw a dip in profits in the last quarter of 2016 which resulted in the laying off of one-third of its workforce – around 290 staff out of 840 both in France and internationally.
The changing consumer drone market, largely due to DJI’s continuing growth, was cited as the main reason for these losses.
This saw Parrot’s leading shareholder, Chairman and CEO Henri Seydoux make a decision to steer the company towards the emerging commercial drone industry. “By rapidly reorganizing the company I am confident in the excellence of our technological choices and our ability to remain a leader while renewing with sustainable and profitable growth,” he said at the time.
The move is expected to turn better profits, said Chief Financial Officer Gilles Labossiere. “Professional drones should generate at least 50 to 60 percent gross margin on the long run where consumer drones cannot generate more than 35 percent of gross margin”, he told Reuters.
While profits have not yet turned around since the company announced their intention to reposition in the commercial drone market, Seydoux has said that these figures are only indicative of the steps the company has been making to further that goal.
“Our results for the first quarter reflect the measures rolled out in 2017 on our consumer product portfolio, and the turnaround in our gross margin is still waiting for revenue growth to resume and new innovations to be launched. This will be initiated from the second quarter, with a first launch planned for early June.”
To support the development of the civil drone market, we have created a completely new technological platform that is scalable, adapted for consumer uses and sufficiently powerful to accelerate synergies with our Drone Business Solutions activities.”
This is the start of a new phase for Parrot and I am confident in our ability to continue developing as Europe’s leading drone group”.
In the last quarter of 2016, consumer UAVs accounted for five-sixths of Parrot’s total revenue from drones, which was a total of 60 million euros.
This has now dropped considerably, with the latest figures indicating that consumer drones now only account for 35% of revenue.
Commercial drone revenue instead now accounts for the lion’s share at 42%, although this is still a 4% drop from Q1 2017 while the company continues to realign itself.
One step in this direction was taken in October of last year with the launch of two ‘prosumer’ mid-range drones aimed at the thermal imaging and precision agriculture market.
They then continued to strengthen their position in the precision agriculture space by entering into an agreement with the Technical Centre for Agriculture and Rural Cooperation (CTA) which covers Africa, the Caribbean and Pacific regions.
Parrot are also leveraging the experience of fixed-wing and quadcopter mapping dronemaker SenseFly, with Executive Vice President Gilles Labossière stepping up to head SenseFly with a view to “developing the subsidiary’s market shares, while accelerating the integration of expertise within the Group,” the company said in a press release.
The question now is what will Parrot’s next step be? A visit to the company’s website shows a mysterious countdown that gives nothing away but how long is left to wait.