OHB, still growing, focused on German, European government hardware programs
PARIS — Satellite and rocket hardware builder OHB of Germany on Nov. 16 said delays in its supply chain had put pressure on its revenue in recent months but that the company’s full-year profitability would be unaffected.
Bremen-based OHB said that after several years of hesitation on the part of its German government customer, the company expects to receive the full development contract for Germany’s Heinrich Hertz telecommunications demonstration satellite by next spring.
Heinrich Hertz will use OHB’s SmallGeo satellite platform to test numerous telecommunications technologies for civil and military applications.
Heinrich Hertz satellite development contract early 2017
In a conference call with investors, OHB said it expected the Heinrich Hertz contract to be valued at around 300 million euros ($330 million). The company has already won a small contract to oversee development of the satellite’s diverse payload instruments.
The recent signing of a contract for full development of Europe’s future Ariane 6 heavy-lift rocket between the European Space Agency (ESA) and Airbus Safran Launchers is expected to yield a 300-million-euro contract to MT Aerospace of Augsburg, Germany, which is 70 percent owned by OHB.
MT Aerospace has already been awarded a 23-million-euro contract with the French space agency, CNES, to provide Ariane 6 launch pad components. CNES is managing the Ariane 6 launch installation under a separate contract with ESA.
The recent agreement between Italy and Germany to divide production of the Ariane 6 solid-fueled strap-on boosters, which also serve as the first stage of the Italian-led Vega small satellite launcher, will mean more work for MT Aerospace and more revenue from OHB. The subject was not brought up during the conference call, however.
OHB and Galileo: 14 down (assuming Nov. 17 launch), eight to go
OHB’s biggest ongoing contract is for the provision of 22 Galileo positioning, navigation and timing contracts to the European Commission, which is the executive arm of the 28-nation European Union.
After early delivery delays, Galileo satellite production at OHB is now on schedule.
Four OHB-built Galileo satellites are scheduled for launch Nov. 17 aboard a European Ariane 5 rocket. Once these are in operation, OHB will have eight more spacecraft to deliver under its contract. Five of these have already been sent to ESA’s Estec test facility in Noordwijk, Netherlands, and three others are in OHB’s final integration facility.
OHB is one of several companies bidding to win a third batch of Galileo spacecraft. Bids were submitted in July. ESA and the European Commission are expected to make a selection in the coming months.
OHB is prime contractor for the second generation of German radar reconnaissance satellites, called SARah, and has encountered no delays there, the company said.
Multiple issues at Dec. 1-2 ESA ministerial conference
OHB is awaiting several decisions by ESA governments expected during a Dec. 1-2 conference of European government ministers in Lucerne, Switzerland.
OHB Chief Executive Marco R. Fuchs said during the conference call that the company’s focus for the ESA conference will be on the Earth observation, science and telecommunications missions that ESA will decide, and well as on the final budget needed for Europe’s ExoMars mission to Mars.
The first ExoMars launch in 2016 culminated in the correct orbit insertion of the Trace Gas Orbiter but the loss of a lander following an apparent computer glitch that caused it to jettison its parachute and stop firing its braking motors too early.
OHB is the prime industrial contract for ESA’s Asteroid Impact Mission, which ESA governments will review at the Lucerne meeting. That mission is operating under severe time constraints: To catch the asteroid and its moon as they make their closest approach to Earth, the mission needs to be launched in October 2020.
For the nine months ending Sept. 30, OHB reported revenue of 507.1 million euros, down 5 percent from the same period a year ago. But its pretax earnings margin was up, to 5.6 percent of revenue compared to 5.3 percent a year ago.
OHB Chief Financial Officer Kurt Melching said the company’s goal of 750 million euros in revenue for 2016 is not guaranteed, especially if there are further delays from its suppliers. But the profitability forecast, of 47 million euros in profit before tax and interest, is well within reach and is the more important metric of the company’s performance.
OHB’s work load remains high as it progresses on several different satellite programs. The company’s growth has continued in 2016. Employment totaled 2,275 as of Sept. 30, compared to 2,056 as of Dec. 31.