Thales Space Sales Dip, But Future Looks Strong

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PARIS — Thales Group of France, which owns 67 percent of space-hardware builder ThalesAlenia Space and 33 percent of space-services provider Telespazio, on Feb. 19 reported a 3 percent decline in space-related revenue but a sharp increase in new orders for 2009 on the strength of new contracts for satellites and for space station hardware.

The Paris-based group’s new chief executive, Luc Vigneron, said in a conference call with investors that the space business is one of the most-promising Thales business segments in terms of growth in the next few years as both government and commercial demand appears solid.

Thales reported that its space division in 2009 posted 1.43 billion euros ($2.05 billion at the Dec. 31 exchange rate) in revenue, down 3 percent from 2008. The company said an April 2009 earthquake at a satellite-component plant in L’Aquila, Italy, caused a loss of 10.1 million euros in 2009 after accounting for insurance claims.

But the company reported an 18 percent increase in new orders, which totaled 1.6 billion euros for the year. As of Dec. 31, the space division’s backlog stood at 2.14 billion euros, up 8 percent over a year earlier.

The space business reported a slight increase in its pretax profit margin, to 5.5 percent, up from 5.4 percent a year earlier.

Thales did not break out the figures for Telespazio, but said revenue at the satellite-services provider dropped during the year. The figures presented represent only the Thales share of the two companies. Finmeccanica of Italy owns the shares of ThalesAlenia Space and Telespazio that are not owned by Thales Group.

ThalesAlenia Space in 2009 booked an order with Orbital Sciences Corp. of Dulles, Va., to provide nine pressurized cargo modules for Orbital’s Cygnus space station supply vessel, a contract valued at 180 million euros. Other major contracts for the year included the Eutelsat W3C telecommunications satellite, the Sentinel 3B Earth observation satellite for the European Space Agency, and a restart of the suspended Globalstar low-orbiting satellite communications constellation of at least 24 satellites.

The 2009 orders did not include ThalesAlenia Space’s recent contract to build the Athena-Fidus Ka-band broadband satellite for French and Italian defense and civil-security forces. Also not included was the expected 1.4 billion-euro contract to lead a consortium building six next-generation Meteosat meteorological satellites.

“The business has been quite active lately, and there are a lot of possibilities in the pipeline,” Thales Chief Financial Officer Patrice Durand said during the conference call.