OHB Expects To Know About Galileo Delivery Dates by Late September

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PONTE VEDRA, Fla. — Satellite and rocket-component builder OHB AG on Aug. 14 said it should know by late September whether the tests of its first Galileo satellites are proceeding well enough to permit their delivery later this year.

In a conference call with financial analysts, Bremen, Germany-based OHB said Galileo’s European government owners want to take the necessary time to validate the performance of the first OHB-built satellites so that production of the 20 remaining spacecraft can be done quickly. 

The 20-nation European Space Agency (ESA) and the commission of the 28-nation European Union are the technical managers and owners, respectively, of the Galileo positioning, navigation and timing constellation. The first of the OHB-built satellites entered testing at ESA’s European Space Research and Technology Centre (ESTEC) in Noordwijk, Netherlands, in May. The second was delivered to ESTEC Aug. 9.

The OHB satellites bear a strong resemblance to the four Galileo in-orbit validation spacecraft now in medium Earth orbit. 

But the on-board power of the OHB spacecraft is greater than that of the validation satellites. Galileo managers made the modification in part to enable Galileo’s encrypted Public Regulated Service signal to overcome a signal frequency overlap issue with China’s Beidou constellation of navigation satellites.

The signal overlap means Europe would be unable to jam China’s signals in a given region in a time of conflict without jamming the Galileo signals as well. It would not affect the functioning of the two systems otherwise.

OHB Chief Executive Marco R. Fuchs said during the conference call that the first two satellites could be delivered to ESA “in a matter of weeks” if the test campaigns at ESTEC go smoothly.

“Before the end of the summer we should have a good understanding of where we are in terms of the schedule,” Fuchs said.

The first two Galileo satellites are scheduled for launch aboard Europeanized Russian Soyuz rockets from Europe’s Guiana Space Center spaceport in South America. European Commission officials have stressed the need to launch the first two satellites this year, with many of the remaining spacecraft to be launched in 2014 to permit early services to start.

During the call, Fuchs confirmed OHB’s previous forecast that its revenue for 2013 would surpass 700 million euros ($910 million), a 10.6 percent increase over 2012.

For the six months ending June 30, the company reported revenue of 310.4 million euros, up 9 percent over the same period last year. Pretax profit was 15.3 million euros, up by nearly 2 percent.

The company’s backlog at June 30 stood at 1.5 billion euros, a figure that does not include the 816 million-euro contract signed with the German defense procurement agency on July 2 for Germany’s second-generation radar satellite reconnaissance system, SARah.

OHB is building two of the three SARah satellites, and subcontractor Astrium GmbH is building the third. OHB and Astrium have contracted with Space Exploration Technologies Corp. (SpaceX) of Hawthorne, Calif., to launch the three satellites aboard two SpaceX Falcon 9 rockets in 2018 and 2019.

Also key to increasing OHB’s backlog for the full year is a 157.5 million-euro contract with Astrium for ESA’s European Data Relay System, which Astrium is managing. OHB is providing a satellite based on its Small-Geo platform, which was developed with ESA funding.

Meanwhile, OHB’s 70 percent-owned MT Aerospace of Augsburg, Germany, is waiting for conclusion of negotiations with Europe’s Arianespace launch services provider on a batch order of 18 Ariane 5 heavy-lift rockets.

MT Aerospace is a major Ariane 5 contractor. Fuchs said the new Ariane 5 orders likely will start with a firm contract for long-lead items, followed by several contract tranches to reach the full 18-rocket order.

OHB continues to face issues with its 70 percent-owned Aerotech Peissenberg GmbH division, which builds aero-engine components. OHB purchased its majority stake in early 2011, replaced the company’s management and appeared to be on track to turning the business around.

But Fuchs said Aerotech Peissenberg this year has struggled to meet delivery dates on its backlog, resulting in a pretax loss for the first six months of the year. A further management reshuffle has been ordered. Fuchs said none of the contracts in the division’s backlog has been canceled, but some have been delayed.

“It’s not only customer delays, it’s also delays under our responsibility,” Fuchs said. “We cannot say it’s only the others. It’s also ourselves.”

Prospects for the second half of 2013 at Aerotech Peissenberg appear better, Fuchs said, and the division should be able to report no pretax loss, but little profit either, for the full year.