OneWeb takes $229 million charge for canceled Soyuz launches

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WASHINGTON — OneWeb took a $229 million charge this year linked to the termination of its Soyuz launch contract and dozens of satellites stranded in Kazakhstan after Russia’s invasion of Ukraine.

In an annual financial report released by the company last month, the company included an impairment charge of $229.2 million in its 2022 fiscal year that said was linked to its suspension of launches of satellites on Soyuz rockets from the Baikonur Cosmodrome in Kazakhstan, including one launch called off just before its launch in March.

The charge, the report states, is intended “to reflect the loss suffered by the Group as a result of the postponement of a planned launch on 4 March 2022, the associated postponement of subsequent scheduled launches, the loss of satellites not returned to the Group and the impairment of a portion of the Group’s prepaid launch insurance.”

OneWeb was about to launch 36 of its satellites on a Soyuz from Baikonur in March when the Russian government put severe conditions on the launch, including requiring the British government to divest its stake in the company. The board of OneWeb declined to agree to those conditions and announced it would suspend all launches from Baikonur. The satellites were placed in storage at Baikonur after the launch was called off and remain there.

According to the report, the charge reflects a reduction in the value of property and equipment, such as satellites, of $272.3 million and loss of prepayments of $1 million. That is offset by the reversal of $44.1 million of charges, including payments for future launches that are no longer scheduled on Soyuz. “Negotiations are ongoing with the related vendors with regards to the recoverability of assets and the undelivered services,” the report states. “As the outcome of these negotiations is uncertain, no asset has been recognised.”

OneWeb has since announced contracts with the Indian space agency ISRO and SpaceX to launch its remaining first-generation satellites. A OneWeb executive said in June that those launches will begin in the fourth quarter of this year, and will be completed by the second quarter of 2023.

OneWeb reported $9.6 million in revenue from the year, which came from its acquisition of TrustComm, a managed satellite communications provider now called OneWeb Technologies. The company reported a net loss of $389.8 million and an earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $186.9 million.

OneWeb and Eutelsat announced July 26 their plans to merge, combining OneWeb’s low Earth orbit satellite constellation with Eutelsat’s fleet of geostationary orbit satellites. “The combination of a LEO/GEO offering for connectivity is forecast to generate substantial value,” OneWeb stated in the report, citing various opportunities to optimize spending, such as through improved purchasing power. The merger is expected to close in the middle of 2023.