Business Description:
Orbital Corporation Limited (OEC) is a developer of innovative technical solutions. OEC provides innovation, design, product development and operational improvement services to the world’s producers, suppliers, regulators and end users of engines and engine management systems for application in motorcycles, marine and recreational vehicles, automobiles and trucks. Orbital's principal operation is in Perth, Western Australia.

Strategy Analysis:
Orbital posted NPAT of $3.4m for the year to June 2004, compared to a loss of $1.9m in the pcp, on revenue of $16.8m. Revenue is not comparable with the pcp due to the restructure of Synerject, which now incorporates Orbital’s marine/recreation system sales and Siemens-VDO’s non-automotive systems. Orbital’s share of Synerject doubled over the period to $2.7m despite an adverse currency movement of $0.6m. Engineering revenue rose 14% to $1.4m, producing a $2.1m result compared to a loss of $0.7m in the pcp. Despite an increase in revenue from Mercury, Tohatsu, UCAL and Bajaj, licence and royalty income fell $0.7m on account of adverse currency movements and lower motor scooter volumes in Europe. Contribution to profit, however, more than doubled from $0.8m in the pcp to $1.7m. Orbital is focused on commercialising its engine technology and penetrating the mass 4-stoke market. Achieving full commercialization of the technology will take time, and in the past Orbital has suffered losses. To address this, Orbital undertook a strategic review in May 2002. The result was to develop fee-for-service engineering services as a means of achieving profit and positive cash flows. Orbital will undertake commercialisation via licensing agreements and joint ventures. The most prominent is its relationship with Synerject. Currently, 30 engines incorporate OCP, with Orbital finding commercial success in the marine/recreation and motorcycle markets. Orbital’s goal is to expand into automotives, where OCP is still in the testing phase.