OHB Technology’s 2005 purchase of rocket-component maker MT Aerospace AG, the former Man Technologie, has begun to pay off in cash flow and earnings, according to OHB Technology AG Chief Executive Marco R. Fuchs.

OHB also is preparing to launch, with the financial aid of the German and European space agencies, a new line of lightweight commercial telecommunications satellites.

OHB and Apollo Capital Partners purchased Augsburg-based MT Aerospace in June 2005 for about 120 million euros ($150 million), with Bremen, Germany-based OHB taking a 70-percent stake.

OHB’s purchase of MT Aerospace, a builder of Ariane 5 rocket components, raised questions among some investors and industry analysts. At the time, MT Aerospace was suffering as the Ariane 5 rocket struggled to establish itself in a market that was in the midst of a recession. “Everyone said we were crazy to do this,” Fuchs said.

In an interview here, Fuchs and his father, OHB founder Manfred Fuchs, said MT Aerospace — which shed some 50 percent of its staff before being purchased — is on track to make a sizable contribution to OHB Technology revenues, backlog and net earnings.

OHB’s backlog grew substantially in the first quarter and MT Aerospace was responsible for nearly three-quarters of that new business, with the new acquisition alone bringing in a total of 293 million euros in orders for the first-quarter period that ended March 31.

Revenues for OHB’s Space Transportation and Aerospace Structure business unit, in which MT Aerospace is the principal business, totaled 25.7 million euros in revenue for the quarter, with pretax earnings of 1.9 million euros.

MT Aerospace also is responsible for the 60-percent increase in OHB Technology’s cash reserves, which stood at 95.1 million euros March 31 compared to 59 million euros a year earlier.

Marco Fuchs said OHB believes it purchased MT Aerospace at the bottom of the company’s business cycle and now will benefit from the stabilization of the Ariane 5 rocket program and the current upswing in the commercial launch business. The business is expected to generate revenues of 100 million euros per year.

Total OHB revenues are expected to be 175 million euros in 2006, the company said in its quarterly earnings announcement May 10.

OHB’s Lux geostationary satellite is now in development following the December decision by European Space Agency (ESA) governments, with Germany in the lead, to finance development of a small satellite platform. Total financing from ESA governments is 66.7 million euros, nearly half of it from the German Aerospace Center, DLR.

DLR officials said here May 17 at the ILA 2006 Berlin air show that the investment is intended to secure Germany’s place as a center for space technology.

Manfred Fuchs said the Lux platform is designed to be placed directly into geostationary orbit, eliminating the need for an onboard apogee kick motor. Without the need for the motor and its fuel, the satellite will have a launch weight of around 1,200 kilograms including 300 kilograms of payload, Manfred Fuchs said.

Marco Fuchs said the joint venture between Astrium Satellites and Antrix of India in telecommunications satellites will not be able to maintain its current price advantage.

“We see products from Russia, India and China, but I don’t believe goods from these countries will be cheap forever,” Marco Fuchs said. “Building a satellite is more than just labor costs. Also, there will always be room for an ITAR-free product from Europe.”

ITAR, the International Traffic in Arms Regulations, is a U.S. law that restricts sales of U.S. satellites and satellite components overseas and has caused some nations to seek alternatives to U.S. satellites and components. OHB’s Lux platform will have no U.S. components that are subject to ITAR, Marco Fuchs said.

Manfred Fuchs said OHB has been working on the Lux satellite platform for more than two years. With the ESA backing, the company foresees a first launch in 2010, with the payload yet to be assigned, he said.

OHB’s breakthrough contract came in late 2001 from the German Defense Ministry, which selected OHB as prime contractor for the five-satellite SAR-Lupe radar reconnaissance contract, valued at about 300 million euros.

The first SAR-Lupe satellite currently is scheduled for launch in December aboard a Russian Cosmos rocket operated from the Plesetsk Cosmodrome.

OHB has benefited from the German government’s concern that Astrium Satellites, which has substantial German roots and ongoing operations, has become more international than German.

Marco Fuchs said OHB also could benefit if Europe’s two large satellite prime contractors, Astrium Satellites and Alcatel Alenia Space, were to merge.

“Mergers of other companies have always been good for us,” Marco Fuchs said. “Germany has invested billions in space and it is only natural that Germany wants to keep a national industrial base that is truly German and is viewed as such. If Astrium and Alcatel were to merge, we would demand that the European Commission force the merged company to divest certain of its activities, and we could be a buyer of those. So this could be very interesting for us.”

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