PARIS
— The Astrium space division of
‘s EADS aerospace giant reported a 29 percent increase in revenue and a 22 percent increase in backlog for the first half of 2009 compared to the same period a year ago. The revenue boost was helped by a one-time back payment from commercial satellite customers to cover in-orbit incentives, EADS reported July 28.

In a July 28 conference call, EADS Chief Executive Louis Gallois said Astrium’s modest pretax profit, at 4.5 percent of revenue, has limited room for improvement because of European government procurement rules for space system prime contractors like Astrium.

Astrium
Space Transportation is prime contractor for
Europe
‘s Ariane 5 rocket and
France
‘s M51 strategic ballistic missile. Astrium Satellites is one of
Europe
‘s two principal satellite prime contractors.

Astrium
reported revenue of 2.19 billion euros ($3.1 billion) for the six months ending June 30. Pretax profit, at 99 million euros, was up 13 percent compared to a year earlier, but the pretax profit margin, at 4.5 percent, was down from 5.2 percent a year ago.

Gallois
said Astrium is forbidden from marking up prices on components provided by its suppliers when it assembles bids for European government space programs. “We are controlled by public authorities,” Gallois said, warning analysts not to expect huge increases in Astrium margins.

Astrium’s
revenue for the period was helped by a one-time, 200 million-euro payment from unnamed commercial satellite customers making what EADS said were “catch-up” payments for incentive milestones. If this one-time payment is excluded, Astrium’s revenue increase would be 17.2 percent.

Commercial satellite operators often withhold a percent of the payment for their spacecraft from the prime contractor until the spacecraft has demonstrated its ability to operate as expected. In many cases, the incentive payments are paid out in annual increments over the full 15 year life of the satellite.

Also increasing Astrium’s revenue was the inclusion, since early 2008, of the Spot Image Earth observation services company as an Astrium subsidiary. Spot Image’s revenue is included in the Astrium Services division. For the six months ending June 30, Astrium Services accounted for 20.75 percent of Astrium’s total revenue – up from 19 percent of Astrium’s total in 2008 despite the continued weakness of the British pound relative to the euro.

Astrium
Services’ biggest contract, with the British Defence Ministry, calls for the company to provide beyond-line-of-sight communications for British defense forces, with satellite communications provided in part by the three Skynet 5 satellites owned and operated by Astrium’s Paradigm Secure Communications subsidiary.

Astrium
Space Transportation accounted for 39 percent of Astrium’s total revenue for the first six months of 2009, with Astrium Satellites accounting for 40.25 percent.

Astrium’s
revenue for the first half of 2009 was 65 percent civil and commercial, and 35 percent defense, EADS said. The company’s backlog stood at 15.6 billion euros as of June 30.