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PARIS — Canadian satellite electronics manufacturer Com Dev International on June 7 said the global telecommunications satellite market continues to be robust and that the average satellite is carrying more transponders than ever before.
Cambridge, Ontario-based Com Dev’s financial health is directly tied to this market, which is mainly for commercial applications but also for civil and military government customers.
Com Dev’s key metric is not the number of satellites being built, but the number of transponders they carry that would require Com Dev’s switches and multiplexers.
By Com Dev’s count, 15 satellites — nine commercial, six for civil government applications — were ordered in the six months ending April 30. These 15 spacecraft carried an average of nearly 47 transponders each.
For the same six-month period a year ago, the same number of satellites — 11 commercial, four for governments — were placed on order, but with an average of 40 transponders each.
Com Dev typically wins at least some work on most commercial and civil-government telecommunications satellites ordered worldwide. In the three months ending April 30 the company won contracts on five of the nine satellites placed on order and was still competing for three others.
Com Dev Chief Executive Michael Pley, in a June 7 conference call with investors, said there is no slowdown in sight for the commercial market, especially as high-throughput satellites delivering fixed or mobile broadband services become popular.
Com Dev already provides components for some U.S. military telecommunications satellites and is positioning itself to boost its share of U.S. government business with its Com Dev USA subsidiary in El Segundo, Calif.
In addition to the satellite telecommunications market, Com Dev is counting on its new exactEarth majority-owned division to generate growth. ExactEarth, which is 27 percent owned by Spain’s Hisdesat, sells Automatic Identification System (AIS) ship-location data using low-orbiting satellites that capture signals on board these ships.
The exactEarth business has 42 trials under way with potential customers testing satellite-delivered AIS, according to Peter Mabson, exactEarth’s president. ExactEarth reported 2.5 million Canadian dollars ($2.5 million) for the three months ending April 30, up 19 percent from the same period a year ago. The business reported a wider net loss of 1.4 million Canadian dollars for the three-month period, compared to 1.2 million Canadian dollars a year ago.
Mabson said he was optimistic that a dispute between the Russian and Kazakh governments over rocket drop zones in Kazakh territory would be resolved soon.
Multiple Russian Soyuz rocket missions into polar low Earth orbit have been delayed because of the dispute, but Mabson said indications are that the grounding of launches into this trajectory from the Russian-run Baikonur Cosmodrome, which is in Kazakhstan, will not last long.
The exactView 1 microsatellite arrived at the Baikonur spaceport June 1 for a launch scheduled for June. It remains unclear what the Soyuz launch manifest will be once Russia and Kazakhstan settle their differences.
In the meantime, exactView is looking to the U.S. Navy-organized Rim of the Pacific (RimPac) international naval exercise to demonstrate exactEarth’s performance to governments that may not be aware of it.
RimPac, which occurs every two years, is scheduled this year to include the participation of 22 nations operating 42 ships, more than 200 aircraft and six submarines.
ExactEarth booked 9.4 million Canadian dollars in orders in the six months ending April 30, including 4.6 million Canadian dollars in Canadian government contract renewals. It will provide maritime domain-awareness information to Canadian military authorities during RimPac 2012. The weeklong exercise begins June 29 and is occurring around the Hawaiian Islands.
RimPac “will provide tremendous exposure to exactEarth,” Pley said during the conference call.
For the three months ending April 30, Com Dev reported 50.1 million Canadian dollars in revenue, down 6 percent from the same period a year ago in what Pley said was an effect of contract timing and not a downturn in the business.
Com Dev booked 59 million Canadian dollars in new orders for the three-month period, up 13 percent from the previous three months and more than double the bookings of the same period a year ago.
Com Dev Chief Financial Officer Gary Calhoun said during the conference call that the company’s gross profit margin, at 25 percent versus 21 percent a year ago, would have been better were it not for the last of five problem-plagued government space programs that remain in Com Dev’s factory.
These firm fixed-price contracts ended up costing Com Dev more than expected. All but one of the five have been completed and are no longer a drag on the company’s finances. The last one, which is expected to be finished in August, saw another 200,000 Canadian dollars in cost growth for the three months ending April 30, Calhoun said.
