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22 Oct 21. Saab’s Results January-September 2021: Strengthened order backlog for continued growth.
Saab presents the results for January-September 2021.
Key highlights Q3 2021
- Strong order intake of SEK 15,605m, an increase of 54%, from orders in Sweden and rest of Europe. Order backlog amounting to SEK 105bn (95).
- Sales increased 32% and amounted to SEK 7,992m driven by high activity level in the defence business. The Q3 2020 included adjustments to project estimates of SEK -1.5bn. Adjusted for this, sales increased 6%.
- EBITDA amounted to SEK 977m (-314), corresponding to a margin of 12.2%. EBITDA and the EBITDA margin improved compared to the adjusted EBITDA in Q3 2020 of SEK 794m and adjusted margin of 10.5%.
- Operating income amounted to SEK 500m (-663), with a margin of 6.3%.
- The operating income and margin improved compared to the adjusted operating income in Q3 2020 of SEK 445m and adjusted margin of 5.9%.
- Operational cash flow was SEK -1,238m (-363) in the third quarter and SEK 1,754m (-128) in the first nine months of 2021.
- New organizational structure with four business areas in effect as of July 1.
- Saab joins the “Race to Zero” initiative to reduce climate impact and adopts a long-term climate goal of net zero emissions by 2050.
Statement by Micael Johansson, President and CEO, Saab:
Strengthened order backlog for continued growth
Saab continued to win important contracts and delivered another growth quarter. Orders grew 54% in the third quarter and 29% in the first nine months of 2021. I am pleased to see orders growing in Sweden, rest of Europe and the U.S., which further strengthens Saab’s position in important markets. Our order backlog is now SEK 105 bn and underlines the strength of our portfolio and the capabilities in our five core areas. With the opening of the new U.S. production site in West Lafayette, Indiana, in October, Saab took an important step in its international expansion.
Sales increased 32% in the third quarter. The same quarter last year included project estimate adjustments of SEK -1.5bn and adjusted for this, sales increased 6%. This was driven by solid project execution in the defence business, partly offset by the weak sales development in the civil aviation business, which continued to decline in the quarter. Sales for the first nine months increased 19% and 11% compared to adjusted sales in the same period 2020.
The improved sales had a positive contribution to EBITDA in the quarter, which increased 23% compared to the adjusted EBITDA in Q3 2020. The EBITDA margin was 12.2%. Operating income in the quarter grew 12% compared to last year’s adjusted operating income and the margin improved from 5.9% to 6.3%. Dynamics was the main earnings driver in the quarter, supported by Ground Combat and Training and Simulation. In Aeronautics, we are now in the last part of the EMD (Engineering, Manufacturing and Development) phase of the T-7A programme. The T-7A operations will continue to have a negative impact on earnings until we ramp up the production in West Lafayette. In Surveillance, operating income improved compared to last year, mainly driven by higher sales, partly offset by higher amortisation cost. Kockums continued to show a year over year improvement in profitability in the quarter.
Whilst society and businesses are returning to normal following the pandemic, the risks in the global supply chains, including shortages in the electronic component market, remain. We have a close dialogue with our suppliers to mitigate potential future effects on supply shortages and secure delivery of products.
Operational cash flow in the third quarter amounted to SEK -1.2bn (-0.4). The lower cash flow in the quarter was due to a temporary inventory build-up in Dynamics and Surveillance. The operational cash flow for the first nine months of 2021 was SEK 1.8bn (-0.1). We reiterate our outlook of positive operational cash flow for the full year.
As we continue on our growth journey, we do so guided by our purpose and fundamental sustainability commitment to help nations keep people and society safe. This is in line with the UN’s Sustainable Development Goal 16 for peace, justice and strong institutions. In the overall contribution to a sustainable society, an urgent focus on climate impact is also necessary. Saab is therefore dedicated to reduce the overall climate impact from emissions in operations, products and across the value-chain. During the quarter, Saab committed to the “Race to Zero” initiative to achieve net zero greenhouse gas emissions by 2050 by setting Science Based Targets. This commitment is one step in our work to meet the increased challenges in sustainability, climate change and emission targets. Year-to-date, Saab’s reduction of carbon emissions from operations in scope 1 and 2 was 15%.
With some Covid-19 restrictions lifted, we now have the opportunity to meet and interact with our customers again. We have an exciting time ahead of us with several market campaigns ongoing, including opportunities for Gripen, GlobalEye, Ground Combat and in the underwater area. I remain confident in our ability to deliver on our long-term targets and create sustainable value for all our shareholders.
21 Oct 21. Less debt, more lift at Rolls-Royce. The iconic UK engineering business once again looks as if it has wings, says Michael Fahy
Investors are often told that a vital factor behind investing is whether a company has a wide enough economic moat – that special something that provides barriers to entry from competitors
Rolls-Royce (RR.), the manufacturer of heavy-duty engines used in everything from aeroplanes to nuclear reactors, may have one, but seems to have spent the past few years floundering in it as it slipped further and further under water.
The engineering giant wasn’t in the greatest shape heading into the pandemic, after two years of heavy losses when it provisioned for everything from the ending of the Airbus A380 programme (for which it provided engines) to restructuring costs, changing accounting standards and durability problems with its Trent 1000 aero engines.
Then Covid-19 dealt the business a near-fatal blow. Before the pandemic, the company made more than half (53 per cent) of its revenue from its civil aerospace business, selling its engines at a loss upfront and recouping profits on aftermarket services linked to the number of hours engines were flown. Last year, engine sales fell from 510 to just 200 and large engine flying hours were only 43 per cent of 2019 levels. The group reported a loss of £2.9bn and, more worryingly, a free cash outflow of £4.2bn.
Management embarked on a second restructuring within three years, which involved shedding almost one-fifth of staff – 9,000 out of 52,000 roles – in a bid to address “medium-term structural challenges” and to reduce overheads by £1.3bn a year. Rolls also raised £5bn to shore up its balance sheet – £2bn through a rights issue, £2bn via new bonds and £1bn from UK Export Finance.
The timing of that capital raising was unfortunate. The £2bn, tri-currency bond issue took place in October, just weeks before major vaccine breakthroughs were announced, which lifted investors’ optimism. Weighting the issuance, Rolls-Royce is paying a rate of about 5.4 per cent on four- and five-year notes and finished the year with total debts of almost £8.3bn.
Although this figure is set to increase to nearly £10.3bn at the end of this year, thanks to further cash outflows and the drawdown of £2bn from UK Export Finance, things have picked up enough over the past month for City analysts to sharply upgrade earnings forecasts.
Consensus forecasts for Rolls-Royce’s earnings per share over the next 12 months have risen to 4.4p as of mid-October, compared with 2.9p a month ago. So what has changed?
First, the UK-US air travel route reopened, which has boosted the prospects for long-haul travel. The International Air Transport Association remains cautiously optimistic about the sector’s recovery, with director-general Willie Walsh saying this month that the industry is “well past the deepest point of the crisis”. Revenue passenger kilometres, a measure of how much paying passengers are travelling, is forecast to remain at 40 per cent of pre-Covid levels this year, but to increase to 61 per cent next year, according to the association’s latest forecast. The long-haul routes on which most of Rolls-Royce’s engines fly will be slower to recover, though – at 44 per cent of pre-Covid levels next year.
Another bright spot for the company is the sale of its ITP Aero business in Spain, which is expected to complete in the first half of next year. The €1.7bn (£1.44bn) disposal to private equity house Bain Capital means Rolls-Royce has already exceeded a target set late last year to realise £2bn by offloading non-core businesses. It has already sold a 23 per cent stake in the Air Tanker refuelling company for £189m last month and the Bergen Engines business for €63m in August. A civil nuclear instrumentation and control business is expected to be sold by the end of this year.
These will help to stem Rolls-Royce’s haemorrhaging of cash, with a further £1.17bn outflow experienced in the first six months of 2021. Management says it expects the group to start generating cash in the second half as it delivers £1bn of its pledged savings, having removed 8,000 of the 9,000 roles targeted for redundancy.
The third significant piece of good news was its defence arm securing a 30-year contract from the US Air Force to replace engines for its B52 planes. The $2.6bn deal involves the supply of 608 F130 engines, as well as spares and associated support.
“That award isn’t material to numbers, but it supports the outlook for the defence business and handily reminds everyone that there’s more to Rolls-Royce that civil aero,” says Rory Smith, an analyst at broker Investec.
Building back debtors’ confidence
As Rolls-Royce’s balance sheet deteriorated last year, its debt was downgraded to junk status, so another management goal is to restore its investment-grade rating. Developments in recent weeks are “credit positive”, ratings agency Moody’s Investors Service said earlier this month, although it maintains its sub-investment grade Ba3 rating and its negative outlook on the group.
The B52 contract win was “a positive and somewhat unexpected development” given strong competition from US-headquartered incumbent Pratt & Whitney and GE, the ratings agency said. It added that, if Rolls-Royce continues to provide evidence it is meeting turnaround targets and returns to a sustainable cash breakeven position, this “would support strengthening of the rating and the outlook”.
This is far from certain though, and the company remains highly levered. Moody’s estimates its total debt by the year-end will be 9.7 times earnings. Its ability to service debt in the short term remains weak, with earnings for this year only covering 60 per cent of its interest charge.
So buying into the Rolls-Royce recovery story is undoubtedly speculative, with both its cash flows and book value likely to be negative this year and the terms of its loan agreement with UK Export Finance forbidding any dividend payments until at least 2023.
On top of this, much of the good news surrounding the group in recent weeks may well be priced in. Its share price is up 27 per cent in the past month, giving the company a market capitalisation of £12bn. The current price of 145p is above the average of brokers’ price targets of 126p, according to data provider FactSet.
The nuclear option
Arguably, however, the re-rating could go further. The group’s defence business, which provided 29 per cent of 2020’s revenue, continues to perform well in a strong market and its power systems business could benefit from the current energy crisis, which is forcing the UK government to take another look at its long-term capacity. The UK’s large-scale nuclear reactor programme has become bogged down while it works out what to do about Chinese involvement, making a proposal to build 16 small modular reactors by a consortium led by Rolls-Royce more appealing.
Press reports ahead of next week’s government spending review suggest Rolls-Royce’s group, which includes the National Nuclear Laboratory and builder Laing O’Rourke, will receive match-funding from the government that will kick-start the programme.
Like the B52 engines win, the sums involved may not bring a huge boost to short-term profits, but they would provide further validation of the group’s engineering credentials and demonstrate that it is not as bad a business as the past few years suggest. And if the aviation arm continues to recover, Rolls-Royce’s lower cost base will allow it to generate much-needed cash to bring down debt further and create more value for shareholders. Worth the gamble. (Source: Investors Chronicle)
20 Oct 21. UK to investigate Parker Hannifin’s $8.7bn planned takeover of Meggitt. The UK CMA will prepare a report on the planned acquisition and will submit it by 18 March next year. The UK Government has ordered an investigation of the planned $8.7bn takeover of British company Meggitt by US-based Parker Hannifin on national security grounds. The UK Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng issued a public interest intervention notice regarding the planned acquisition and asked the Competition and Markets Authority (CMA) to prepare a report. The CMA will assess the potential consequences of the deal and determine if it will lessen competition in any market within the UK for goods or services. Meanwhile, interested parties can submit their responses on the impact of the transaction to the CMA by 19 November 2021. The final report will include a summary of these representations. The move by the government represents the first phase of assessment. The UK Secretary of State will make the final decision and may recommend a Phase 2 assessment of the transaction, if necessary. Separately, Meggitt announced that it has noted the government announcement. The company said that it is looking forward to engaging constructively with the CMA on its review. Despite the review, Meggitt added that it still expects the acquisition to be completed in the third quarter of 2022. Notably, the acquisition was announced in August this year. Last month, Meggitt shareholders approved the transaction. Meggitt is an engineering company operating in the aerospace, defence and energy markets. It employs more than 9,000 people. (Source: army-technology.com)
21 Oct 21. SRT Marine eyes H1 pre-tax loss. Maritime industry services provider SRT Marine Systems said on Friday that group revenues for the six months ended 30 September came to £4.7m, generating an expected pre-tax loss of £3.1m. SRT Marine stated that in its transceivers division, revenues improved The AIM-listed firm’s systems unit continued to receive cash payments during the half from existing system contracts, as scheduled, but failed to complete any revenue milestones and, as a result, recognised no project implementation revenues.
Chief executive Simon Tucker said: “I am very pleased with the performance of our transceivers business and the consistent growth track record that appears set to continue into the second half. It is with considerable relief that the Covid stagnation affecting the progress of new contracts for our transceivers business has abated.
“There has been significant and growing activity and engagement with customers during the period across a wide range of new system opportunities. Of particular note are £71.0m of long-awaited contracts for which the contract finalisation and commencement status and process is now clear and confidently expected during the second half.” (Source: Sharecast)
20 Oct 21. Mirion Technologies Announces Completion of Business Combination with GS Acquisition Holdings Corp II. Mirion Technologies, Inc. (“Mirion”), a leading provider of detection, measurement, analysis and monitoring solutions to the nuclear, defense, medical and research end markets, today announced that it has closed its previously announced business combination with GS Acquisition Holdings Corp II (“GSAH”). Upon completion of the transaction, which was approved by GSAH stockholders on October 19, 2021, GSAH changed its name to “Mirion Technologies, Inc.” Mirion’s Class A common stock and warrants are expected to begin to trade on the New York Stock Exchange (“NYSE”) on October 21, 2021, under the ticker symbols “MIR” and “MIRW”, respectively.
Thomas Logan, Chief Executive Officer of Mirion, commented, “Today marks a significant milestone for Mirion, as the capital raised through this transaction, paired with our new access to the public markets, will enable us to drive both organic and inorganic growth and execute on our product innovation strategy as we continue to expand globally. We look forward to driving long-term shareholder value by delivering leading detection, measurement, analysis and monitoring solutions to the nuclear, defense, medical and research end markets.”
Tom Knott, Chief Executive Officer of GSAH, added, “We are very pleased to have closed our business combination with Mirion, which we believe to be a market-leading business with a-cyclical exposures, attractive organic growth, a demonstrable history of success integrating bolt-on M&A, and an experienced management team prepared to deliver long-term, sustainable returns to shareholders.”
Prior to the closing of the business combination, Mirion was majority owned by Charterhouse Capital Partners LLP (“Charterhouse”), one of the longest established private equity firms operating in Europe, which first invested in Mirion in 2015.
Chris Warren, Partner at Charterhouse, remarked, “Mirion’s robust growth in recent years is a testament to the dedication of the whole Mirion team. Having become the global leader in nuclear measurement, and following its strategic expansion into medical and life sciences, Mirion is well positioned to capitalise on a wide range of additional growth opportunities. We look forward to seeing Mirion’s continued development and further accomplishments in years to come and wish Tom and his team the best of luck.”
The transaction raised approximately $604 m from GSAH trust proceeds, $900 m from a fully committed common stock private placement (PIPE) and $830 m from a senior secured term loan financing. The foregoing reflects the fact that holders of approximately 5 m shares reversed their redemption status, increasing the GSAH trust proceeds expected to be available for the business combination by approximately $50m since October 15, 2021. A portion of the proceeds will be used to pay $1.3bn to existing Mirion stockholders, to refinance approximately $909 m of existing Mirion third-party debt and to pay certain transaction expenses.
Mirion Technologies is a leading provider of detection, measurement, analysis and monitoring solutions to the nuclear, defense, medical and research end markets. The organization aims to harness its unrivaled knowledge of ionizing radiation for the greater good of humanity. Many of the company’s end markets are characterized by the need to meet rigorous regulatory standards, design qualifications and operating requirements. Headquartered in Atlanta (GA – USA), Mirion employs around 2,500 people and operates in 13 countries. For more information, and for the latest news and content from Mirion, visit Mirion.com. Prior to the closing of the business combination, Mirion was majority owned by Charterhouse Capital Partners LLP.
GS Acquisition Holdings Corp II (NYSE: GSAH) is a special purpose acquisition company formed for the purpose of effecting a merger, stock purchase or similar business combination with one or more businesses. The company is sponsored by an affiliate of The Goldman Sachs Group, Inc. In June 2020, GSAH completed its initial public offering, raising $750m from investors. (Source: BUSINESS WIRE)
21 Oct 21. Elbit Systems Signs Definitive Agreement to Sell Ashot to FIMI Opportunity Funds for $88m. Elbit Systems Ltd. (NASDAQ:ESLT and TASE: ESLT) (“Elbit Systems”) announced today the signing of a definitive agreement for the sale of all ordinary shares held by its wholly-owned Israeli subsidiary, IMI Systems Ltd. (“IMI”), in IMI’s 84.98%-owned subsidiary, Ashot Ashkelon Industries Ltd. (TASE: ASHO) (“Ashot”) and all capital notes of Ashot held by IMI and Elbit Systems, to FIMI Opportunity Funds (“FIMI”), for approximately $88m in cash (approximately NIS 285 m). The transaction is conditioned on various closing terms, including receipt of certain regulatory approvals. Ashot specializes in the manufacture of jet engine shafts, transmissions, gears and gearboxes, landing gear components and tungsten products for the aerospace and defense industries. FIMI is a leading private equity fund in Israel with more than $5.5bn in assets under management.
Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, said: “Since the acquisition of IMI by Elbit Systems, Ashot has undergone several processes to improve its business focus and operational efficiency. This sale is consistent with our strategy to focus on our core areas of business. We look forward to continuing our cooperative work with both Ashot and FIMI”.
About Ashot Ashkelon Industries
Ashot is a vertically integrated company engaged in the development, manufacture, and assembly of systems, subsystems and components under one roof and according to customer specifications. Ashot’s manufacturing capabilities include production engineering, various types of machining, gear cutting and finishing, all under strict, in-house quality control. Ashot invests in its core technologies, capabilities and professional team, with an emphasis on concurrent engineering.
About FIMI Opportunity Funds
Since its founding by Ishay Davidi in 1996, FIMI has completed 96 investments, executed 65 exits with total transaction value of more than $5.5bn and raised seven funds. FIMI’s investors include commercial banks, insurance companies, provident and pension funds, family offices and high net worth individuals from the United States, Europe, UAE, the Far East and Israel.
21 Oct 21. KBR Completes Frazer-Nash Consultancy Acquisition, Expands International Advisory Footprint. KBR (NYSE: KBR) announced today it has completed the acquisition of Frazer-Nash Consultancy Limited, a leading provider of systems engineering, assurance and technology advisory services, from Babcock International Group PLC. This acquisition is a continuation of KBR’s strategic journey to advance upmarket to deliver innovative, digitally-enabled solutions to governments and customers around the world. Frazer-Nash delivers systems engineering, systems assurance and technology to solve the world’s most complex challenges, with its talented teams providing a broad range of professional advisory services across the defense, energy and critical infrastructure sectors primarily in the U.K. and Australia. With expertise in areas such as systems engineering, data science, cyber, and clean energy, Frazer-Nash is highly complementary with KBR’s global priorities with minimal overlap because of its geographic footprint.
“We are excited to welcome Frazer-Nash into the One KBR family, aligning our joint focus on helping customers solve their most complex problems,” said Stuart Bradie, KBR President and CEO.
“Frazer-Nash adapted ahead of the curve to evolve with changing market dynamics, while delivering consistent profitable growth. With market tailwinds in our favor, we are well positioned to continue our journey together.”
21 Oct 21. Parts makers Nexteam, Ventana to merge. French aircraft parts manufacturers Nexteam Group and Ventana Group have agreed to join forces, creating a combined company with 2,400 employees, according to a joint announcement. The merged entity will have 22 production sites, and a presence in seven countries in addition to France: Austria, Morocco, Poland, Portugal, Romania, Sweden, and Tunisia. It will serve business, commercial, and military airplanes; civil and military helicopters; satellites; space launch vehicles, and “the main defence programmes”, the 6 October announcement says. Nexteam and Ventana are based in the towns of Marmande and Narcastet, respectively, both of which are in southwestern France. Nexteam was founded in 2015 through the merger of several family-owned companies. Ventana was created in 2003, and has made acquisitions to help it grow. Nexteam’s investors include French private equity firm Ace Capital Partners, while Ventana’s owners include Austrian private investment company Montana Holding. The merger announcement does not indicate who will own the combined entity or when the transaction is expected to close. (Source: Janes)
19 Oct 21. Audax-backed FDH Aero acquires Stealth Aerospace. FDH Aero (FDH), an aerospace and defence products distributor serving aircraft production and aftermarket supply chains, has acquired Stealth Aerospace (Stealth). Stealth Aerospace, founded in 1995, is a stocking distributor of aerospace electrical and electro-mechanical components including relays, switches, connectors, lamps, avionic components, latches, wire & cable and other electrical products to the airlines and aerospace industry worldwide. Based in Southern California, Stealth brings to FDH a leader in the US commercial and cargo aerospace aftermarket, strengthening FDH’s ability to serve its global aftermarket customer base.
“Alon and the Stealth team have built a remarkable business servicing many of the world’s prominent aerospace companies. We are excited to help bolster Stealth’s growth while continuing to support their reputation for high-quality service as a part of the FDH family,” says Scott Tucker, CEO of FDH Aero.
“Stealth’s partnership with FDH will enhance our ability to provide best-in-class support to our customers,” says Alon Glickstein, President of Stealth Aerospace. “We look forward to continuing our recognised history of excellent service and AOG support to our customers under the FDH umbrella, and we are excited to have the strength of the FDH team with us as we continue to grow our business.”
Stealth operations will continue to be led by Alon Glickstein.
Stealth Aerospace is FDH’s ninth acquisition, and seventh completed since Audax Private Equity (Audax) invested in the company in 2017.
20 Oct 21. British Satellite scale-up raises £15m in oversubscribed Series A funding.
- The fundraising is Satellite Vu’s second successful raise in the last six months, raising a total of £19m (US$26m) over the period
- The new funding will allow the Company to launch seven British made satellites into space to monitor the thermal footprint of any building on the planet every 1-2 hours
- Satellite Vu’s latest funding round of £15m ($20.7m) was led by the Seraphim Space Investment Trust Plc, the world’s first listed Space Tech Fund. Also investing in the round include Draper Esprit; A/O PropTech, Europe’s largest proptech VC and Ridgeline Ventures.
British satellite scale-up Satellite Vu, founded in 2016, has successfully raised £15m ($20.7m), as it looks to ramp up its plans to launch seven thermal and infrared imaging satellites into space that will be able to provide real-time data on how green every building on the planet is.
Satellite Vu’s latest funding round of £15 m ($20.7 m), which was oversubscribed, was led by the Seraphim Space Investment Trust Plc, the world’s first listed Space Tech Fund. Also investing in the round is Draper Esprit; A/O PropTech, Europe’s largest proptech VC; Ridgeline Ventures; Earth Science Foundation; E2MC Ventures and Stellar Solutions/Ford Family Trust.
The funding round highlights Satellite Vu’s rapid growth, with the company having raised its seed round funding of £3.6m ($5m) just six months ago. Satellite Vu’s first satellite – being manufactured in Guildford, Surrey, UK – will collect real-time temperature data about the Earth’s built environment several times a day, allowing for key insights around energy efficiency and how individual buildings are being used and occupied. The first satellite is due to be launched into orbit in October 2022.
This data can be updated every 1 to 2 hours, and the use of infrared means coverage is guaranteed even at night.
By measuring the heat coming off a building, Satellite Vu will provide data that will be able to show if any individual building is being heated efficiently or which parts of a city are the worst emissions offenders. This matters acutely when it comes to the built environment because the real estate industry is one of the largest contributors to climate change. It makes up 40% of global carbon emissions when accounting for construction and building performance.
Satellite Vu’s data has the potential to be a game-changer for anyone involved in building, funding and insuring real estate and infrastructure. By providing global data at a micro-local level, the technology has the ability to empower real estate market actors to make the right changes to make building stock greener.
UN Secretary-General António Guterres called the recent IPCC report “a code red for humanity”, which highlighted how vital it is for changes to be made now to start tackling climate change. But without accurate data, both the private and public sectors will struggle to make the correct decisions quickly enough to ensure that the pace of change is fast enough. Insurers, investors, banks and building owners will also all be able to use the data to make better-informed decisions. For example, regulators have also mooted a clampdown on leaky commercial buildings in the UK, with plans to increase the minimum standard of energy performance certificates to a B grade, ruling thousands of properties as stranded assets.Owners and funders of those buildings will need to know which parts of their portfolio could fall foul of incoming regulation and adjust valuations and buy/hold strategies as a result.
The initial use of the data will be for the built environment, but the data will also be able to be used for:
- Pollution flows into rivers and seas
- Wildfire monitoring
- Maritime security (people trafficking/pirates/illegal fishing)
- Monitor for compliance, safety and net zero credential of industrial processes such as mining, steel and cement
- Regulators could use the data to ensure their sustainability standards are accurate
Satellite Vu has also been backed by the UK Space Agency through its National Space Innovation Programme (NSIP) to support the build of the infrared sensor for its first satellite. The UK Government recently launched a National Space Strategy aimed at advancing British space technology, which included measures to back businesses like Satellite Vu that help tackle global challenges such as climate change.
Satellite VU will be attending COP 26.
Anthony Baker, CEO of Satellite Vu, said: “With COP 26 just around the corner and Europe and parts of the USA having suffered the hottest summer on record, there is growing acceptance that we need to act now to try to mitigate the impacts of climate change on our everyday lives and economy. But while many think of industries such as aviation as some of the least sustainable, the built environment is actually one of the primary polluters across our globe. But regular individual monitoring of these buildings is too expensive both in terms of time and cost, meaning much of the environmental and sustainable ratings are often years out of date. That’s simply not good enough when we clearly need to act now and means many are not aware of just how poorly a building is performing in terms of sustainably.
“Our groundbreaking use of infrared and thermal imaging technology on our satellites will mean that landlords, funders, insurers and governments and regulators will be able to access real-time information at an affordable cost that will provide them with a single source of truth on how sustainable a building really is meaning they can take steps to make that building more sustainable. This latest round of funding means we can look ahead to the launch of our first satellite in late 2022 and start the process of securing delivery slots for the remaining six.”
James Bruegger, CIO of Seraphim Space LLP, Seraphim Investment Trust’s investment manager, said: “We have been committed to Satellite Vu for a number of years, first through our Accelerator programme and then through multiple investments. Our significant increase in investment shows the enormous promise that high resolution infrared satellite data holds in solving serious issues impacting the world. With 40% of all carbon emissions coming directly / indirectly from buildings, finding a way to pinpoint the worst energy wasting buildings at global scale is a pressing issue if the world is to achieve Net Zero. By measuring the thermal footprint of any building on the planet, Satellite Vu’s high resolution, high revisit infrared satellite constellation holds the key to resolving this.”
Gregory Dewerpe, founder of A/O PropTech, said: “Investing in the fight against climate change means backing innovation and bold ideas, but it also means we have to do it now if we are to have any hope of reaching our net zero ambitions. Real estate is the most polluting asset class in the world and it’s also the largest one. This means that reaching our net-zero goals globally will only be possible if we successfully decarbonise real estate. Satellite Vu’s accurate, real-time measurement of the energy performance can become the single source of truth when it comes to calculating, benchmarking and reducing buildings emissions and show us exactly where to prioritize- something that neither current regulations nor systems, which are based on historical operational use data, are able to do at scale and systemically.”
George Chalmers, Draper Esprit said: “Retrofitting the world’s existing building stock is a key lever for achieving any net-zero roadmap. Currently, we are lacking the insight needed to deploy, at scale, the trillions of dollars needed in this area. Consistent and robust data is crucial across every layer of the stack, from government and regulators to financiers and insurers.
“Satellite Vu is bringing a whole new category of data and solutions to these important markets. We believe in its potential to lead the charge in how we measure the energy efficiency and carbon footprint of our built world and deliver on the promises we are making to our planet.”
15 Oct 21. Turkish-Qatari venture BMC facing liquidity challenges. Leading armored vehicles maker BMC, a Turkish-Qatari venture, is going through liquidity snags after a recent change in ownership, Defense News has learned. The company, which has a multibn-dollar contract in its portfolio to produce the Altay, Turkey’s first new-generation, indigenous tank, is on a shrinking stage of unknown scale, company sources said, speaking on condition of anonymity while discussing internal details. A trade union representative said that the company recently laid off nearly 30 white-collar workers. Blue-collar workers fear mass redundancies or unpaid leaves may follow. The trade union representative also said that some production units went from three shifts a day to single shift. BMC has also ceased producing its civilian Tuğra truck. Construction of a large production unit in Karasu, Sakarya, in northwestern Turkey, came to a halt due to financial reasons. Subcontractors complain of unpaid bills.
“Cash inflows are weak to support corporate-level functioning,” one BMC official admitted. “We are hoping that this is only a temporary situation.”
Another BMC official put the blame on the company’s massive debt stock at the time of the takeover. “We took over a debt stock that has become a challenge to manage,” he said. “The company needs new and sizable contracts.”
BMC has a politically controversial history. In 2014, businessman Ethem Sancak’s Es Mali Yatırım Danışmanlık company purchased BMC, then a troubled armored vehicles maker, for $350m. BMC had been seized by the government’s banking fund for its former owner’s unpaid debts worth $75 m.
Sancak, a close aide of President Recep Tayyip Erdoğan, served at top boards of Erdoğan’s ruling Justice and Development Party (AKP). Talip Öztürk, a distant relative of Erdoğan, invested $100 m in BMC to become partners with Sancak.
Erdoğan also brokered a deal in which a Qatari fund invested $300 m to buy a 49.9% share in BMC. Sancak now owned 25% of BMC and had already raised a net $50m for the entire venture.
In a deeply controversial move, Erdoğan’s government allocated a 544 acres of public land (in Karasu, Sakarya) to BMC to be used in the company’s future investments. Subsequently BMC defeated two local rivals and won a strategic contract for the initial production of a batch of 250 Altay tanks. Defense industry sources estimate the Altay contract, involving an eventual 1,000 units, to amount to around $11bn.
In May 2018 the government granted 1.4bn Turkish lira (approximately $250 m) investment incentives to BMC for the Altay program, including tax cuts, pension premium reductions, subsidized energy and perks. The government also allocated, in a gratis deal, a military tank production and maintenance factory in Arifiye near Istanbul to BMC. The company was only obliged to invest $50m in return for a right to operate the Arifiye plant for 25 years. Turkey’s opposition parties wanted a parliamentary investigation into the BMC story but the effort was voted down by Erdoğan’s AKP.
Based on 2020 defense revenue, BMC ranked 89th in the Defense News Top 100 annual rankings with the equivalent of about $533 m.
In May 2021, Sancak and Öztürk sold their 50.1% share in BMC to a Turkish steel producer, Tosyalı Holding, for $480m.
Tosyalı Holding is a leading iron and steel producer, which also has close ties to Erdoğan. Tosyalı operates three facilities on three continents and produces six m tons of steel annually. The company employs over 10,000 people. Its other business interests include maritime, port operation, foreign trade and power generation.
Could the Altay contract not come to BMC’s help? “Even if production started today, deliveries cannot take place before five years,” a senior BMC engineer said.
The Altay program has its own problems, too. It has faced major delays due to failed access to significant components like the engine, transmission and armor. In March, BMC was in talks to pen twin strategic agreements with two South Korean companies for joint work on a power pack for the new-generation tank. Under the deals South Korean manufacturers Doosan and S&T Dynamics would supply the engine and transmission mechanism for the Altay.
“We are still in talks … so far unable to reach an agreement,” the first BMC official said.
As of Oct. 14, BMC did not reply to Defense News’ request for comment. (Source: Defense News)
19 Oct 21. Iridium Announces Third-Quarter 2021 Results; Raises 2021 Outlook. Iridium Communications Inc. (Nasdaq:IRDM) (“Iridium”) today reported financial results for the third quarter of 2021 and updated its full-year 2021 outlook. Net loss was $2.1 m, or $0.02 per diluted share, for the third quarter of 2021, as compared to net loss of $4.0 m, or $0.03 per diluted share, for the third quarter of 2020. This decrease in net loss was primarily the result of operating profit improvements and lower net interest expenses. Operational EBITDA (“OEBITDA”)(1) for the third quarter was a record breaking $100.2 m, as compared to $93.4 m for the prior-year period, representing a year-over-year increase of 7% and an OEBITDA margin(1) of 62%. OEBITDA benefitted from increases in revenue across the board.
Iridium reported third-quarter total revenue of $162.2 m, which consisted of $127.8 m of service revenue and $34.4 m of revenue related to equipment sales and engineering and support projects. Total revenue increased 7% versus the comparable period of 2020, while service revenue grew by 9%. Service revenue, which represents primarily recurring revenue from Iridium’s growing subscriber base, was 79% of total revenue for the third quarter of 2021.
The Company ended the quarter with 1,690,000 total billable subscribers, which compares to 1,429,000 for the year-ago period and is up from 1,616,000 for the quarter ended June 30, 2021. Total billable subscribers grew 18% year-over-year, driven by growth in commercial IoT customers.
“We feel really good about the momentum we’re seeing in our business. It’s broad-based and a function of strong top line growth, good execution and strong partner activity. Together, these factors provide Iridium a clear runway for long-term growth,” said Matt Desch, CEO, Iridium. Desch continued, “With the flood of new capital making its way into the space industry, Iridium continues to distinguish itself as a leader in satellite communications by leveraging its unique network and spectrum position to connect people, vehicles and assets on the move. We continue to generate stronger free cash flow as we attract new subscribers to our network, which sets us up well as we plan for 2022.”
Commenting on its full-year outlook, Desch added, “In light of strong underlying demand and continued subscriber momentum, Iridium is raising its full-year guidance for 2021. We now expect total service revenue growth of between 5% and 6% and operational EBITDA of approximately $375m this year.”
Iridium Business Highlights
Service – Commercial
Commercial service remained the largest part of Iridium’s business, representing 63% of the Company’s total revenue during the third quarter. The Company’s commercial customer base is diverse and includes markets such as maritime, aviation, oil and gas, mining, recreation, forestry, construction, transportation and emergency services. These customers rely on Iridium’s products and services as critical to their daily operations and integral to their communications and business infrastructure.
- Commercial service revenue was $101.9m, up 11% from last year’s comparable period due to an increase in revenue from IoT, voice and data, and broadband services.
- Commercial voice and data subscribers were up 6% from the year-ago period to 372,000 subscribers. Commercial voice and data average revenue per user (“ARPU”) remained steady at $41 during the third quarter.
- Commercial IoT data subscribers grew 25% from the year-ago period to 1,156,000 customers, driven by continued strength in consumer personal communications and other IoT applications. Commercial IoT data ARPU was $8.93 in the third quarter, compared to $9.48 in last year’s comparable period, resulting from a growing proportion of personal communications subscribers utilizing lower ARPU plans. This effect was offset somewhat by increased usage by aviation subscribers given the increase in air traffic from last year’s third quarter.
- Commercial broadband revenue was $11.5m, up from $9.1m in the year-ago period. This rise was primarily attributable to ongoing adoption of Iridium Certus® broadband service. Commercial broadband average revenue per user (“ARPU”) was $299 during the third quarter, compared to $270 in last year’s comparable period.
- Iridium’s commercial business ended the quarter with 1,541,000 billable subscribers, which compares to 1,287,000 for the year-ago period and is up from 1,463,000 for the quarter ended June 30, 2021. IoT data subscribers represented 75% of billable commercial subscribers at the end of the quarter, an increase from 72% at the end of the prior-year period.
- Hosted payload and other data service revenue was $14.6m in the third quarter compared to $14.5m in the prior-year period.
Service – Government
Iridium’s voice and data solutions improve situational awareness for military personnel and track critical assets in tough environments around the globe, providing a unique value proposition that is not easily duplicated.
Under the Enhanced Mobile Satellite Services contract (the “EMSS Contract”), a seven-year, $738.5m fixed-price airtime contract with the U.S. Air Force Space Command signed in September 2019, Iridium provides specified satellite airtime services, including unlimited global standard and secure voice, paging, fax, Short Burst Data®, Iridium Burst®, RUDICS and Distributed Tactical Communications System services for an unlimited number of Department of Defense and other federal government subscribers. Iridium also provides maintenance and support work for the U.S. government’s dedicated Iridium® gateway under two other contracts with the U.S. Air Force Space Command. Iridium Certus airtime services are not included under these contracts and may be procured separately for an additional fee.
- Government service revenue was $25.9m in the third quarter compared to $25.1m in the prior-year period, reflecting the impact of a contractual step-up in the EMSS Contract on September 15.
- Iridium’s government business ended the quarter with 149,000 subscribers, which compares to 142,000 for the year-ago period and is down from 153,000 for the quarter ended June 30, 2021. Government voice and data subscribers increased 7% from the year-ago period to 65,000 as of September 30, 2021. Government IoT data subscribers increased 4% year-over-year to 84,000 and represented 56% of total government subscribers.
- Equipment revenue was $26.9 m during the third quarter, compared to $25.1m in the prior-year quarter. The Company now expects equipment revenue to be greater this year than in 2020.
Engineering & Support
- Engineering and support revenue was $7.5m during the third quarter, compared to $9.4m in the prior-year quarter, primarily due to the episodic nature of contract work.
Capital expenditures were $8.8m for the third quarter, which includes $0.4 m of capitalized interest. The Company ended the third quarter with gross debt of $1.63bn and a cash, cash equivalents and marketable securities balance of $289.0m, for a net debt balance of $1.34 bn.
During the quarter ended September 30, 2021, the Company repurchased approximately 72,000 shares of its common stock under its previously announced $300m share repurchase program at a total purchase price of $2.6m. As of September 30, 2021, $174.9m remained available and authorized for repurchase under this program.
The Company updated its full-year 2021 outlook for total service revenue and OEBITDA and currently anticipates:
- Total service revenue growth of between 5% and 6% for full-year 2021 (previous outlook was for total service revenue growth of between 4% and 5%). Total service revenue for 2020 was $463.1m.
- Full-year 2021 OEBITDA of approximately $375m (previous outlook was for OEBITDA of between $365m and $375m). OEBITDA for 2020 was $355.6m.
- Negligible cash taxes in 2021. Cash taxes are expected to be negligible through approximately 2023.
- Net leverage of below 3.5 times OEBITDA at the end of 2022, assuming $300.0m in share repurchases. Net leverage was 3.6 times OEBITDA at September 30, 2021.
(1) Non-GAAP Financial Measures & Definitions (Source: PR Newswire)
TCI International, Inc., is a wholly-owned subsidiary of SPX Corporation. TCI provides turn-key solutions for spectrum management and monitoring, direction finding, geolocation and communications intelligence to civilian, government, military and intelligence agencies as well as antennas for communications and high-power radio broadcasting. TCI is headquartered in Fremont, California, USA. For more information, visit www.tcibr.com.