Spacecom Climbs to Profitability in 2018

Spacecom has been on a downward spiral since 2016, when its AMOS-6 satellite exploded on its launch pad in pre-checks and cost the company a $95 million contract with Facebook and a $285 million acquisition deal with telecommunication technologies supplier Beijing Xinwei Technology Group

Israel-based company Space Communication Ltd. (Spacecom) has soared to profitability in the fiscal year 2018, according to the annual report the company published Thursday. Spacecom reported a net profit of $14.9 million in 2018, compared to a net loss of $13.6 million. The change is the result of increased revenues—$80.1 million in 2018 compared to $74 million in 2017—and also of differences in currency exchange rates. Operational profit was $24.8 million, up 270% from $6.7 million in 2017.

 

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Tel Aviv-listed Spacecom has been on a downward spiral since 2016, when its AMOS-6 satellite exploded on its launch pad in pre-checks and cost the company a $95 million contract with Facebook and a $285 million acquisition deal with Shanghai-listed telecommunication technologies supplier Beijing Xinwei Technology Group Ltd. Spacecom’s stock dropped by over 70% over the past three years, further impacted by delays related to its AMOS-8 satellite.

 

AMOS-6. Photo: PR

 

 

In late February, Spacecom announced that AMOS-17, which already has a client lined up, will launch in May or June and bring profit as of September. The company’s stock has risen by around 45% since.

 

Earlier this month, Israeli satellite television provider Yes announced its intention to switch to fiber optics broadcasting instead of satellite broadcasting within seven years. In 2018, Yes contributed 27.3% of Spacecom’s revenues—$21.8 million—compared with 29.4% in 2017.

 

Spacecom expects Yes to retain the contract until 2026, Spacecom CEO David Pollak told Calcalist in a recent interview. The announcement did not surprise Spacecom, he said, and the company expects to counteract the diminished revenues with AMOS-17, which will draw revenues mainly from Africa. The new satellite is expected to launch in June, with the exact date to be announced in upcoming days, he added.