Israeli satellite company loses contact with satellite, suffers heavy losses in stock exchange

The Russian-built satellite accounted for one third of Spacecom's revenue.

By ADI BEN-ISRAEL/GLOBES
Updated: NOVEMBER 22, 2015 11:12
Amos 5 satellite launch. (photo credit: SPACECOM)
Amos 5 satellite launch.
(photo credit: SPACECOM)
Spacecom Satellite Communications Ltd. lost contact with its Russian-built satellite Amos 5 on Saturday, at 06:45 Israel time, according to the company's notification to the Tel Aviv Stock Exchange, causing a hiatus in the company's customer service capabilities, particularly in African countries.
Spacecom, under the leadership of  Shaul Elovitch, has a market cap of NIS 1.1 billion on the Tel Aviv Stock Exchange. According to it's second quarter financial statements, the orders backlog for the satellite was $136 million.
The satellite is recorded in Spacecom's books at $153 million.
In the first six months 2015, Spacecom had a revenue of $54 million and posted a loss of $1.4 million.
Loss of contact with the Amos 5 resulted in the loss of about a third of Spacecom's revenues.
The Amos 6 satellite, for which Spacecom has already signed a $1 billion contract with Facebook, is due to be launched only in February next year. Capital market sources estimate that it will take about three years to launch a replacement satellite for Amos 5.
Spacecom's share price is currently down by about 30% on the Tel Aviv Stock Exchange. "The company shrank by a third this morning," a market source said.
The Amos 5 satellite is insured at a value of $158 million, and Spacecom stresses that even if the satellite fails completely, the effect on its shareholders' equity will be "negligible".
Amos 5 was launched from a site in Kazakhstan in 2011, and even before its launch the company signed a five-year contract for satellite communications in Africa worth nearly $28 million.


Related Tags
israel satellite