Rocket-component and satellite builder OHB Technology of Germany reported higher revenue but lower profit for the nine months ending Sept. 30. Company management said it was sticking with earlier forecasts that full-year revenue will increase by 15 percent and pretax profit by 12 percent.
Bremen-based OHB said the lower profit is a temporary feature of satellite work for which it outsources substantial shares and earns little profit. Contracts with the 18-nation European Space Agency, in particular the Small-Geo telecommunications satellite design for which OHB is prime contractor, include strict limits as to the amount of margin prime contractors can tack on to subcontracted work.
Similarly, OHB’sKayser-Threde satellite division in Munich is subcontracting much of its work on the EnMaphyperspectral Earth observation satellite, and the outsourced work is of marginal profitability to OHB. EnMap is being financed by the German Aerospace Center, DLR.
For the nine months ending Sept. 30, OHB reported revenue of 210.5 million euros ($316 million at current exchange rates), up 18 percent over the same period a year ago. But pretax profit, at 13.4 million euros, was down 10 percent, and net profit was down 21 percent, to 5.6 million euros.
OHB Chief Executive Marco R. Fuchs, in a Nov. 10 conference call with investors, said the company is reiterating its former forecast that 2009 will see revenue increase by 15.4 percent, to 300 million euros, with pretax profit to climb by 12 percent, to 21 million euros.
The nine-month results do not include OHB’s recent purchase — from OHB shareholders, including Fuchs and his family — of Carlo Gavazzi Space SpA of Milan, Italy. Carlo Gavazzi, which builds small satellites for government customers, including the Italian Space Agency, is expected to report about 65 million euros in revenue this year, Fuchs said, but will only be consolidated into OHB’s books starting in the fourth quarter. In 2008, Carlo Gavazzi reported a 7.2 percent operating-profit margin and, as of Aug. 31, an order backlog of 95 million euros.
OHB purchased Carlo Gavazzi for 5.94 million euros in cash and OHB stock valued at the time at 20.3 million euros.
OHB is awaiting news on two contract bids that, if successful, will have a large impact on the company’s satellite-manufacturing division. OHB and partner SurreySatellite Technology Ltd. of Britain are one of two consortia vying for a contract to build up to 22 Galileo navigation satellites for the European Commission.
The second contract is for the Meteosat Third Generation meteorological satellite system for Europe’s Eumetsat organization of Darmstadt, Germany.
