Orbital UAV (ASX: OEC) Announces Strategic Partnership with Carbonix

In a recent ASX announcement, Orbital UAV (ASX: OEC) has formalised a strategic partnership with Sydney-based Carbonix through a Memorandum of Understanding (MOU). This agreement will see the integration of Orbital’s Heavy Fuel Engine technology into the proven Ottano UAV platform. The Orbital UAV Carbonix partnership validates the company’s Mission Ready Engine strategy whilst strengthening Australian sovereign capability in the remotely piloted aircraft systems (RPAS) sector.

ASX: OEC
Market Cap: $33.13 million
Shares on Issue: 179,065,432
Cash Position: $3.685 million (as at 28 October 2025)

The collaboration combines Carbonix’s expertise in long-endurance composite airframe design with Orbital’s proven propulsion technology. Both companies describe the outcome as a next-generation Australian RPAS platform capable of meeting demanding national and international customer requirements.

What does the new partnership mean for shareholders?

This collaboration represents a significant validation of Orbital’s Mission Ready Engine strategy, which involves offering their existing range of core heavy fuel engines with non-military specifications. This approach positions Orbital to capture a broader market beyond traditional defence contracts, providing a key investor update on the company’s growth trajectory.

Stephen Pearce, CEO of Orbital UAV, stated: “The MOU with Carbonix validates Orbital UAV’s new Mission Ready Engine strategy of offering the existing range of Orbital core heavy fuel engines with non-military specifications. We look forward to working with Carbonix to create the next-generation Australian RPAS platform capable of meeting the demanding requirements of national and international customers.”

Key strategic benefits for Orbital UAV include:

• Technology Validation: The partnership demonstrates the commercial viability of military-grade technology in civilian applications.
• Market Expansion: It provides access to commercial and allied defence customers through non-military specifications.
• Revenue Diversification: This move reduces dependence on single military contracts.
• Sovereign Positioning: It creates a strong competitive advantage in Australian and allied markets.

The collaboration focuses on integrating and evaluating Orbital’s propulsion systems with a variant of the Ottano platform, specifically targeting enhanced performance, reliability, and endurance for long-range and Beyond Visual Line of Sight (BVLOS) operations.

How will the integration enhance Ottano’s operational capabilities?

The integration of Orbital’s Heavy Fuel Engine technology is expected to deliver substantial performance enhancements for Carbonix’s Ottano platform. The joint effort will advance several critical operational parameters that could reshape the platform’s market positioning across commercial and defence environments.

Expected capability improvements include:

Dario Valenza, CEO of Carbonix, commented: “Our collaboration with Orbital marks an important milestone in expanding Ottano’s capability and reinforcing our commitment to Australian-made technology.”

The enhanced platform will be positioned to serve multiple market segments, including defence surveillance, commercial monitoring, infrastructure inspection, and research applications requiring extended operational periods.

Why is Australian sovereign capability critical for this partnership?

The Orbital UAV Carbonix partnership addresses a strategic imperative: building domestic aerospace manufacturing capabilities whilst reducing dependence on foreign defence technology. This collaboration represents a significant step toward establishing Australian sovereign capability in the RPAS sector.

Strategic sovereign benefits include:

• Technology Independence: 100% Australian-designed and manufactured RPAS solutions.
• Supply Chain Security: Domestic production eliminates foreign dependencies.
• Intellectual Property Control: Australian-owned technology and manufacturing processes.
• Defence Readiness: Reliable domestic supply for critical defence applications.

The partnership demonstrates how collaboration between homegrown innovators can deliver world-class solutions built and supported in Australia. This end-to-end Australian capability positions both companies to capture growing demand from customers seeking alternatives to traditional suppliers.

What commercial applications will benefit from this technology?

The integrated platform creates opportunities across multiple commercial sectors. The venture enables extended operational capabilities that serve various industry requirements through enhanced endurance and reliability.

Primary commercial applications include:

• Infrastructure Monitoring: Extended surveillance of pipelines, power lines, and transport networks.
• Environmental Monitoring: Long-duration environmental and climate research missions.
• Agricultural Services: Comprehensive crop monitoring and precision agriculture applications.
• Emergency Services: Search and rescue operations requiring extended flight times.
• Border Security: Extended patrol missions for customs and immigration services.

The Mission Ready Engine strategy specifically targets these applications by adapting military-grade technology for civilian use, enabling Orbital to access new markets whilst maintaining its defence technology leadership.

How does this partnership validate Orbital’s strategy?

This agreement provides critical third-party validation of Orbital’s strategic pivot toward commercial markets. The Mission Ready Engine strategy centres on offering core heavy fuel engines with non-military specifications, significantly expanding the total addressable market.

Key validation elements include:

• Technology Adaptability: The collaboration demonstrates that military-grade propulsion technology can be successfully adapted for commercial applications.
• Partnership Framework: Orbital is partnering with established platform manufacturers like Carbonix to accelerate market access.
• Market Expansion: Offering non-military specifications allows Orbital to target a broader customer base.
• Competitive Differentiation: The partnership showcases Orbital’s unique position as an Australian propulsion specialist with both military-grade capability and commercial adaptability.

What are the financial implications for Orbital UAV investors?

With a market capitalisation of $33.13 million and a cash position of $3.685 million, the Orbital UAV Carbonix partnership creates multiple potential value catalysts for shareholders. The collaboration provides technology validation whilst opening access to new revenue streams.

Key financial considerations include:

• Revenue Diversification: The partnership reduces dependence on single military contracts by establishing pathways into commercial UAV markets.
• Capital Efficiency: By partnering with Carbonix, Orbital leverages existing platforms and customer relationships, optimising capital deployment.
• Technology Leverage: The collaboration extracts additional value from existing engine technology, maximising return on previous research and development.
• Market Validation: This validation could accelerate additional collaborations across the UAV sector.

The partnership positions Orbital to benefit from growing defence budgets focused on sovereign capability, creating balanced risk-reward dynamics for investors.

How will the partnership progress?

The collaboration will advance through structured development phases focused on the integration and evaluation of Orbital’s propulsion systems with the Ottano platform. While specific timelines were not disclosed, development is expected to follow established industry patterns.

Phase 1: Technical Integration
Engineers from both companies will collaborate on adapting Orbital’s heavy fuel engines for the Ottano airframe. This phase includes compatibility assessment and detailed system integration planning.

Phase 2: Prototyping & Ground Testing
Following the integration planning, a prototype will be developed for rigorous ground testing. This stage will verify the functionality and safety of the integrated systems before any flight trials commence.

Phase 3: Flight Trials & Performance Validation
The prototype will then undergo extensive flight trials to collect data on performance metrics such as endurance, reliability, range, and fuel efficiency. This validation is critical to confirming the platform meets customer requirements.

Phase 4: Commercialisation & Market Entry
Upon successful validation, the partners will prepare for commercial production and market entry, targeting key defence and commercial sectors both domestically and internationally.

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