Maritime tracker exactEarth cuts costs, awaits Iridium fleet deployment
April 11, 2017
PARIS — Satellite maritime vessel-tracking company exactEarth has given up on returning its eV-5 satellite to service but said its loss will have no meaningful effect on the company’s service, especially with four payloads on the Iridium Next satellites set to become operational in May.
Canada-based exactEarth said the 13-kilogram eV-5, built by SpaceQuest Ltd. of Virginia and launched in August 2011 for a designed 10-year service life, was insured for 3.5 million Canadian dollars ($2.6 million) and that its insurers had paid the full claim.
ExactEarth operates a fleet of small satellites in low Earth orbit that capture signals emitted by Automatic Identification System) transponders that larger vessels must carry by law. Shore-based radars are unable to detect these signals when ships are far from shore.
ExactEarth is one of several companies, including Spire Global and Orbcomm, that are developing AIS businesses using satellites to provide governments a commercial interests with a global maritime picture of ship whereabouts, heading, speed and basic identification.
Hosted payloads on Canadian, Spanish government satellites
The company has two more payloads on larger satellites on the way. The eV-7 AIS payload is on board the Canadian government’s M3M satellite, launched in June 2016 but still awaiting final regulatory and licensing approval for commercial use by exactEarth.
The eV-8 AIS payload is hosted aboard the Spanish government’s Paz radar Earth observation satellite, which has suffered multiple launch delays aboard the Russian-Ukrainian Dnepr rocket. Spanish authorities recently announced that they had switched to a SpaceX Falcon 9 rocket and secured a late-2017 launch slot.
The major event for exactEarth, however, is its partnership with Harris Corp. of the United States, under which 60 AIS payloads will be launched aboard Iridium Communications’ Iridium Next second-generation constellation.
Four of the 10 first Iridium Next satellites launched in January by SpaceX carry AIS payloads for exactEarth. The company said April 6 that it expected them to enter service by the end of May.
A second Iridium 10-satellite launch by SpaceX is scheduled for June. Nine of these satellites carry AIS gear. The remaining 47 Iridium Next satellites are scheduled for launch in 2017 and early 2018, assuming that SpaceX can meet its aggressive 2017 launch-cadence schedule.
Painful loss of Canadian government contract to Orbcomm
ExactEarth has been traversing a difficult period in recent months, especially since the loss of a key Canadian government contract to rival Orbcomm.
For the three months ending Jan. 31, exactEarth reported revenue of 3.3 million Canadian dollars, down 48 percent from the same period a year earlier because of the loss of the Canadian contract.
ExactEarth Chief Financial Officer Sean Maybee said in a conference call with investors that total revenue increased slightly after removing the Canadian government effect.
The company reported a negative EBITDA, or earnings before interest, taxes, depreciation and amortization, of 640,000 Canadian dollars for the three-month period, down from a positive 1.5 million Canadian dollars a year earlier.
In response to the revenue slip, exactEarth has enacted cost-saving measures that include a 26 percent reduction in headcount as of Jan. 31.
Chief Executive Peter Mabson said the measures should enable exactEarth to return to positive cash flow by the end of its 2017 fiscal year.
The good news in the quarterly earnings report was from new orders, which totaled 8.9 million Canadian dollars, more than double the bookings in the same period a year earlier.
India’s Navy contracts for AIS service
Among the new contracts were the Canadian Department of National Defence, which wants AIS data processing as part of the Polar Epsilon 2 project, a contract valued at 2.7 million Canadian dollars over four years; and the Indian Navy, which through India’s Antrix Corp. — the commercial arm of the Indian Space Research Organization — contracted for $1.75 million in AIS service.
An unidentified Asian nation contracted for 2 million Canadian dollars in AIS services over five years, exactEarth said
Mabson said exactEarth remains confident that the Canadian government will be a big customer over time despite the loss of the contract in late 2016.
“If I take it at face falue, they are saying that in their more general capabilities, for the moment at least, they believe they can get by with a level of service that is not as high as it was before, and pricing is different for that,” Mabson said in explaining the contract loss.
Beyond Canada, Mabson said the deployment of more AIS payloads on the Iridium Next fleet “will be major events for us,” especially as the constellation, which exactEarth calls exactEarth RT, for real-time, will offer continuous global tracking of vessels.
“When RT is rolled out, we’ll see a significant ramp-up in the number of vessels that are detected and the raw detection capability, as well as the refresh and update rates,” Mabson said. “This will make the service more valuable.”
For certain value-added applications such as ship surveillance and real-time tracking, he said customers were willing to pay a 50-100% premium over standard services.
The company sees AIS and adjacent markets as providing substantial growth over time:
Peter B. de Selding