OHB Reports Revenue Up 17 Percent on Galileo Satellite Work

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PARIS — Satellite and rocket-component builder OHB AG of Germany on Nov. 7 reported a 17 percent increase in revenue for the nine months ending Sept. 30 as its Galileo satellite navigation contract delivered the expected boost.

Bremen-based OHB said its pretax profit increased to 5.2 percent of revenue from 4.5 percent a year ago.

In a conference call with investors, OHB Chief Executive Marco R. Fuchs said the company’s Space Systems division, which builds satellites, “is well on track to improving profitability,” which had been a company focus.

The company’s Aerospace and Industrial Products division increased its pretax profit margin to 3.7 percent versus 1.8 percent a year ago.

This division includes Aerotech Peissenberg, a builder of aeronautical engines and industrial gas-turbine components, in which OHB purchased a 70 percent share in early 2011. OHB has changed Aerotech management and has said it will take time before profitability meets expectations.

Aerotech Peissenberg is in the same division as OHB-owned MT Aerospace, which builds components of Europe’s Ariane 5 heavy-lift launch vehicle.

MT Aerospace’s role in the current Ariane 5, and its likely role in any modifications of the vehicle, combined with the company’s unclear role in any successor Ariane 6 rocket, is one reason OHB has been a vocal backer of an Ariane 5 upgrade called Ariane 5 Midlife Evolution.

Any Ariane 6 decision, OHB has said, should be postponed until that vehicle’s design, performance and industrial composition are decided.

European Space Agency (ESA) government ministers are scheduled to meet Nov. 20-21 in Naples, Italy, to decide the future of Ariane and other ESA government programs.

OHB has divisions in Italy, Sweden, Belgium and Luxembourg in addition to its major operations in Germany, giving it a special interest in those nations’ government spending, much of it directed through ESA.

In the conference call, Fuchs said he was confident that Germany’s contributions to ESA at the Naples meeting “will not be cut. There will be a slight increase,” compared with German contributions to the last ESA ministerial conference in 2008.

But the Italian government’s plans, he said, remain unclear. Italy is ESA’s third-largest contributor after France and Germany. OHB’s CGS division, a builder of small satellites, does much of its business with the Italian government. OHB is already undertaking efforts to reduce the debt of its Italian arm.

“Italy is a big question mark,” Fuchs said of Italy’s plans for the ESA conference. “Sweden, Belgium and Luxembourg are on a good path. We would be very happy if the Italian contribution is the same” as it was in 2008.

While restating his company’s preference for an Ariane 5 upgrade instead of an immediate shift to Ariane 6, Fuchs sought to reassure investors by saying Ariane 5 will be flying for another decade no matter what decision is made.

For the nine months ending Sept. 30, OHB reported revenue of 429 million euros ($558 million). The company reaffirmed its forecast that full-year 2012 revenue would surpass 620 million euros, up 11 percent over 2011.

OHB Chief Financial Officer Kurt Melching said during the call that the company booked 120 million euros in revenue in the nine months ending Sept. 30 and that will climb higher in the coming months. OHB is prime contractor for 22 Galileo positioning, navigation and timing satellites for ESA and the European Commission.

OHB is also prime contractor, with Thales Alenia Space of France and Italy, for Europe’s Meteosat Third Generation meteorological satellites. That contract remains in its preliminary phase. Melching said OHB booked 40 million euros in revenue from it in the nine months ending Sept. 30.