CENTER HARBOR, New Hampshire — Small-satellite manufacturer AAC Microtec said it still expects to reach its 2018 financial goals — becoming EBITDA positive late in the year with full-year revenue at 85 million Swedish krona ($9.4 million) — despite reporting a wider loss in the three months ending June 30.
Swedish-based AAC, which owns smallsat builder Clyde Space of Scotland, said its gross profit was affected by challenges in one of its larger projects, which it did not identify.
AAC Chief Executive Alfonso Barreiro said the issue would be “resolved in the short term.”
AAC had told investors that 2018 would be its breakout year as multiple new orders worked their way to the revenue and EBITDA lines and the company took advantage of its position as a major small-satellite platform and component builder for an industry witnessing fast growth.
The quarter was in line with expectations, with revenue of 22.1 million Swedish krona, up more than fourfold over the same period a year ago. But EBITDA, or earnings before interest, taxes, depreciation and amortization, was a negative 5.6 million krona, compared to a negative 4.8 million krona a year ago.
In a statement to shareholders, Barreiro said AAC booked 25.6 million krona in orders during the second quarter. AAC’s current thesis is that many customers will begin with an order of one or two satellites and then commit to a full constellation.
“[S]everal of these orders come from customers developing small satellites that are meant to be included in larger constellations,” Barreiro said. “These customers have as a strategy [to launch] one, two or four small satellites to demonstrate the services of the future constellation to offer.
“Once they have shown that the payload works as promised, they intend to get funding to build constellations with far more satellites. During the quarter we received such orders South American, Japanese and Spanish operators.”
Kepler Communications of Canada is expected to be a showcase example of this. The company has ordered the first two satellites for its machine-to-machine, narrowband Ku-band communications network from Clyde Space.
The first was launched aboard China’s Long March rocket in January, and Kepler subsequently completed its International Telecommunication Union (ITU) “bringing into use” requirement, thus securing its Ku-band frequency registration in low Earth orbit — a first.
The second satellite is scheduled for launch late this year.
Kepler has now ordered a third satellite, this one a 6u cubesat — the previous were 3u — as a prelude to its full constellation. The latest order is valued at 3.5 million Swedish krona.
AAC’s satellite component business is run to handle orders from other platform builders and the company earlier this year expanded its relationship with York Space Systems to include batteries in addition to the previous agreements on power and data-management systems.
The company also struck an agreement with QinetiQ Space NV of Belgium, part of the well-established QinetiQ group, in which QInetiQ will offer AAC’s satellite platforms of one to 50 kilograms, plus components and services, to QInetiQ customers.
“QinetiQ is one of the leading system integrators in Europe’s space industry and a main supplier of small satellites over 100 kg to the European Space Agency, ESA,” Barreiro said. “In addition to the quality stamp this gives us, by means of their networks we reach a significantly broader market.”