An Industry Holding its Own

Even in these uncertain and turbulent economic times it seems that the demand for satellite systems and services is still up. The satellite manufacturers are busy, the operators are busy and the launch service providers are even busier trying to keep pace with the demand for new capacity. The market is still working hard to meet this demand so what is the financial picture for the satellite industry? Well, there is a general concensus that the market will take a lot longer to recover than it normally would and the rollercoaster ride is set to continue for some time yet. Regional operators are still responsible for a large proportion of growth and there is still strong demand for transponders. In relation to other media and telecoms business sectors, satellite is performing quite well but it is a bit of a mixed bag as some operators have been stable, others more erratic. The first satellite casualty of the credit crunch so far has been Worldspace that filed for Chapter 11 bankruptcy earlier this month.

Pacome Revillon, Managing Director of Euroconsult told us: “I think that the industry has been in very good shape. Revenues last year grew by 0.5 percent which is record growth in that decade and evidence shows that there will be growth of 0.8 percent this year. On top of that, with high fill rates, good demand for capacity and increasing prices in certain regions, margins in the industry, on average, have increased”. This is impressive, given the amount of panic that has gripped the global markets. However, it should be noted that the newer and smaller regional operators will probably find the crisis more difficult to overcome.

The amount of satellites being manufactured seems testimony to the fact that the industry is looking healthy and demand is high. Manufacturers are working on multiple contracts and are delivering ever more complex satellites that will fulfil the evolving demands placed upon operators by their customers. Growing popularity of HD and other services are pushing the satellite manufacturers further than ever before and flexibility is now the name of the game.

Although there is plenty of doom and gloom around at the moment, the satellite industry is providing a chink of light. It sounds crazy, but perhaps there is a positive way of looking at this credit crisis. Perhaps this is a wake up call. Credit has been far too easy to obtain. Perhaps a period of tighter lending will be a good thing in the long run for an industry that invests a huge amount of money in its assets.

SES reports continued strong results
Romain Bausch, President and CEO of SES, commented: “These solid figures underline the strength and visibility of SES’s business model. We have continued our development with the successful launch and entry into commercial service of the AMC-21 satellite over North and Central America, which will support our continued growth, given the continued healthy demand for satellite capacity. Our pipeline of ten new and replacement satellites will deliver organic growth, while we continue to seek other opportunities to add to our global coverage. In the challenging credit market environment, we are well funded, with resources available to meet our requirements during the next twelve months."

General Dynamics - strong earnings & backlog growth in third quarter 2008
General Dynamics reported 2008 third-quarter earnings from continuing operations of $634 million, or $1.59 per share on a fully diluted basis, compared to 2007 third-quarter earnings from continuing operations of $544 million, or $1.34 per share fully diluted. Revenues rose to $7.1 billion in the quarter, a 4.5 percent increase over third-quarter 2007 revenues of $6.8 billion. Net earnings, which were equal to earnings from continuing operations, increased 16 percent over the year-ago period...

Orbital reports solid third quarter 2008 financial performance
Orbital Sciences Corporation has announced its financial results for the third quarter of 2008. Orbital’s third quarter revenues were $278.6 million in 2008, compared to $275.6 million in 2007. The company reported third quarter operating income of $21.0 million in 2008, compared to $21.6 million in 2007...

WorldSpace announces receipt of Nasdaq Staff Deficiency Notice related to non-compliance with listing requirements
1worldspace™ has announced that on Oct. 21, 2008, it received notice from the staff of The Nasdaq Stock Market, LLC that the Company will be delisted. Under Marketplace Rules 4300, 4340(b), 4450(f) and IM-4300, the Nasdaq staff has discretionary authority over the continued inclusion of the Company's securities on Nasdaq in the event that a Nasdaq-traded company files for protection under any provision of the federal bankruptcy laws...

Litigation against Globalstar dismissed
Globalstar announced that, on September 30, 2008, a consolidated securities class action lawsuit against the Company and certain of its officers, stemming from the Company’s initial public offering, was dismissed with prejudice by the United States District Court for the Southern District of New York...

Telenor to take a 60 percent stake in Unitech Wireless in India
Telenor has entered into a definitive agreement to subscribe to new shares in Unitech Wireless for a consideration equivalent to USD 1,070 million. Subject to regulatory approvals, Telenor will hold a 60% controlling stake in Unitech Wireless...

Space Systems Loral enters into $100 million revolving credit agreement
Space Systems/Loral (SS/L) has entered into a three year, fully secured $100 million revolving credit agreement led by J.P. Morgan Securities Inc. and syndicated among six of the world's largest banks...

Boeing issues statement on ICO Verdict
Boeing Senior Vice President and General Counsel J. Michael Luttig issued the following statement today after a Los Angeles jury rendered a verdict against the company in its defense of a breach of contract suit pressed by ICO Global Communications Holdings Ltd...

AST aquire Capricorn Satellite, South Africa
Applied Satellite Technology Ltd (AST), have announced the addition of Capricorn Satellite Communications, South Africa to its growing group of companies. Following the incorporation, Capricorn Satellite Communications will change its name to AST South Africa, forming an integral part of the group’s corporate strategy to increase its global reach...