Q-Free has taken several actions to prevent the spread of the corona virus based on advice from local authorities in all countries where the company operates. Most office-employees globally are now working from home, while special measures have been introduced to protect personnel working in laboratories and in the field. Travel has been reduced to an absolute minimum. To the best of our knowledge, all our employees are in good condition.
Manufacturing of products for the Tolling and Traffic Management segments is expected to continue without significant disruptions. Deployment of our software solutions can also continue without significant problems. Still, Q-Free expects a temporary negative financial impact from the corona virus crisis. It is impossible to predict the magnitude at this stage, but performance will be negatively affected by:
- Reduced revenues from transaction-based tolling contracts following a significant drop in traffic in major cities
- Delayed progress on ongoing Tolling and Traffic Management projects following government/customer restrictions for on-site work and travel
- Delayed decision processes related to new tenders and contract awards
- Delayed tag purchases and orders for smaller product deliveries
- Extraordinary currency exchange rates that influence our cost base negatively
- Temporary capacity reduction at our manufacturing site for Infomobility products in the UK due to local quarantine rules.
Q-Free has taken several actions to offset the financial effect on the company: Consulting contracts have been terminated, some employees have been permanently or temporarily laid off, and our remaining employees have agreed to a temporary salary reduction during these challenging times. Q-Free is continuously assessing additional measures that can reduce cost in the short-term without endangering the ability to win and deliver world-class solutions to our customers.
Liquidity is currently tight but does not have a significant negative impact on day-to-day operations. In May Q-Free must make the final payment for the remaining shares of Intelight. This will enable Q-Free to integrate its US activities within Traffic Management in a more effective and efficient way, which is expected to generate both extra sales and cost synergies in the years ahead.
As previously communicated, Q-Free has decided to divest its Parking and Infomobility assets to focus its resources and capital on Tolling and Traffic Management. The ongoing divestment processes are now paused, but not terminated, due to the general financial uncertainty and travel restrictions caused by the corona virus outbreak.
The combined effect of the negative operational impact of the corona virus situation, the payment for the remaining Intelight shares, and the delayed divestment of assets is expected to cause a temporary strain on the company’s liquidity. Consequently, Q-Free is evaluating different ways to improve the liquidity and funding of the Group. The company is also in close dialogue with its main bank with respect to both existing engagements and future capital structure.
For further information, please contact:
President & CEO, Håkon Volldal: +47 977 19 973
Q-Free is a leading global supplier of ITS (Intelligent Transportation Systems) products and solutions. The company has approximately 400 employees, offices in 16 countries, and a presence on all continents. Headquartered in Trondheim, Norway, Q-Free is listed on the Oslo Stock Exchange under the ticker QFR.