Spacecom prepares to launch Amos 3 satellite

Spacecom yesterday announced strong results for the year 2007, happy anticipation of more of the same in the future and the imminent launch of Amos 3, its third communications satellite. Fourth-quarter revenues were sharply down but profits spiked, the satellite communications company revealed yesterday.

Two reasons for the joy in 2007 was dropping outlay on interest, and a sharp fall in its allocation for questionable debt. That sent profit soaring for the Amos 1 and 2 satellite operator. Spacecom, which is owned by Israel Aerospace Industries (IAI) and Eurocom Holdings, reported a 47% increase in net profit to NIS 9.8 million for the fourth quarter of 2007, compared with the same period the year before. Profit and loss figures are likely to change dramatically in 2008, when the firm starts reporting in dollars - and Amos 3 will be flying. Its launch is scheduled for late April.

Despite the impressive bottom line and surging demand that has pushed up prices of satellite services, revenues dropped 11% in the fourth quarter compared to 2006, to NIS 33 million. pacecom quotes market studies projecting an increase of 5% to 8% a year in demand for satellite commmunication services. But meanwhile, its falling revenues ate into its gross revenue and operational profit, which fell 14% against the parallel to NIS 11.2 million.

The fall in operational profits was somewhat offset by shrinking doubtful-debt provision to NIS 1.7 million, from NIS 4.4 million in 2006. Also, its outlay on interest fell to NIS 0.7 million, from NIS 3.4 million in the fourth quarter of 2006.

Spacecom's Amos 3 satellite is scheduled for launch on April 24. Like its predecessors, it will be positioned 36,000 km above earth at 4 degrees west. IAI, which actually manufactured the satellite, has insured the launch of the satellite and its location in orbit for one year following the launch for $130 million, and its location in orbit for five years for another $40 million. Spacecom will bear the cost of the insurance six months after the launch.

Spacecom has already leased 76% of Amos 3's capacity through 2008, generating revenues of $190 million. The company expects that the Amos 3 will bring in $150 million by the end of its life span in 2024.