OHB Technology AG expects to raise its revenue
and pretax profit forecasts based on strong performance at its MT Aerospace unit, a rocket-component manufacturer, and continued work on Germany’s SAR-Lupe radar reconnaissance satellite system, company officials said.
The Bremen, Germany-based company also said it is among the prospective prime contractors bidding for surveillance satellite programs in Kazakhstan and Turkey.
In an Aug. 10 conference call with financial analysts, OHB Technology Chief Executive Marco R. Fuchs said OHB’s June 2005 purchase of a 70-percent stake in MT Aerospace, then part of Germany’s MAN Group, is looking like a better deal with every month that passes.
Augsburg, Germany, MT Aerospace makes Ariane 5 rocket components. OHB and Apollo Capital Partners purchased the company for about 120 million euros
at a time when the Ariane 5 heavy-lift launcher program was just emerging from a three-year redesign following a December 2002 failure.
But the recent rebound in the commercial launch market and the corresponding upswing in prices, coupled with Ariane 5’s steady performance, has boosted prospects for MT Aerospace and the rest of the Ariane 5 manufacturing team.
Fuchs said OHB might
need to hire staff for MT Aerospace if, as is now being considered, the commercial-launch consortium asks its contractors to step up their production rhythm to seven or eight launchers per year from the current five to six
OHB Technology reported revenues of 85.5 million euros for the six months ending June 30. Pretax profit was 12 million euros. EBITDA, or earnings before interest, taxes, depreciation and amortization, was 18.3 percent of revenues for the period. The company’s backlog at June 30 stood at 440 million euros, or more than two years’ revenue
. Fuchs said OHB is sticking with its forecast of 175 million euros in revenues for the whole of 2006.
OHB Technology’s space transportation division, in which MT Aerospace is the principal asset, now accounts for 58 percent of the company’s revenues. Fuchs said MT Aerospace is profitable and likely will increase its profitability should Ariane 5 launcher production be increased.
“The launcher market has improved dramatically in the past 12 months,” Fuchs said. “The current schedule for this year is 5-6 Ariane 5 launches. We are now discussing with Arianespace and the other manufacturers a possible increase to 7-8 launchers per year. This does not happen from one day to the next. It takes time.” OHB owns 8.16 percent of Arianespace S.A., the French-based launch consortium.
Adding MT Aerospace “basically tripled the size of the company – we are doing three times the previous business and reporting three times the earnings per share compared to before the purchase.” Some 35 percent of the company’s equity is traded on the Frankfurt Stock Exchange. The remaining shares are privately held by the Fuchs Pool, controlled by the Fuchs family. OHB was founded by Manfred Fuchs.
The first out of a planned five SAR-Lupe high-resolution radar satellites has been built and will be put through final testing beginning this summer before an expected December launch, Fuchs said.
In addition to being prime contractor for the satellites, OHB is responsible for much of the ground installations that communicate with the spacecraft. Following an agreement on satellite-reconnaissance data exchange between France and Germany, OHB is providing additional ground hardware so that French and German military users will both have access to SAR-Lupe and French Helios 2 optical imagery.
OHB Finance Director Kurt Melching said during the conference call that a further contract for SAR-Lupe ground segment work relating to France — a contract called E-SGA/FSLGS – is expected by this fall and will be valued at between 17 million and 18 million euros.
OHB owns 11 percent of Orbcomm Inc. of Dulles, Va., which operates a constellation of low-orbiting satellites to provide messaging services. The company is managing development and launch of an Orbcomm satellite to test services for the U.S. Coast Guard. The satellite had been scheduled for launch in August but has been delayed until the fall
, Fuchs said.
OHB’s ongoing businesses are generating sufficient cash that the company is evaluating for further acquisitions. “The space industry continues to reorganize and consolidate and we want to be part of this,” Fuchs said. “But deals like [MT Aerospace] does not come along every year, and of course, if Ariane has a launch failure, then life looks different for us.”