Orbital Corporation Limited (ASX:OEC), an Australian company specialising in the design and manufacture of integrated propulsion systems and flight critical components for tactical unmanned aerial vehicles (UAVs), has provided an update on its business strategy and market focus. The company supplies Group 2 & 3 UAV propulsion systems, distinct from complete drones, for UAVs with takeoff weights up to 600kg and wingspans reaching 10 metres. These UAVs are typically used for surveillance and reconnaissance missions, with flight times extending up to 12 hours at 20,000 feet. Orbital’s proprietary technology centres on 2-stroke heavy fuel direct air injection and related engine management systems, protected by 30 patents with an average remaining life of 12 years.
The company highlighted the evolving global UAV market, driven by increased payload demands, vertical takeoff and landing (VTOL) configurations requiring in-flight battery charging, and stringent safety and reliability standards mandated by aviation authorities like the FAA in the US and CASA in Australia. Military operations increasingly favour heavy fuel for single-fuel policies, a market where Orbital’s engines have accumulated over 1.2 million flight hours with Tier 1 OEMs, including Boeing subsidiary Insitu and Textron Systems. Orbital’s product range spans engine capacities from 50cc to 350cc, along with engine management and electrical power management systems.
Orbital reported FY24 revenues of $8.2 million and a current order book of $6.2 million, supported by 56 employees. The company serves a global customer base across the US, Southeast Asia, the Asia Pacific region, India, and Europe. A new management team is in place to spearhead business transformation. Furthermore, Orbital noted the U.S. Drone Dominance Policy (Executive Order 14307) as a catalyst for domestic UAV production, backed by USD 150 billion in funding through to 2032.
The company is strategically targeting three growth avenues: deepening partnerships with Tier 1 defence OEMs, expanding sales of standardised IPS configurations to Tier 2 military and Tier 1 commercial UAV manufacturers, and offering flexible in-service support packages. Orbital anticipates a reduction in revenue from FY24 to FY25, primarily due to a decrease in deliveries to Boeing Insitu. Due to the uncertainty of the US Department Defence decision timetable on future UAV orders per the US Drone Dominance Policy, the Company is unable to provide guidance on FY26 financial forecasts.
