Concentration of business news from 2005
Space: contracts with Ukrainian channels for 5 million dollars
The Israeli company, which provides satellite communication services, signed new contracts with 3 Ukrainian TV channels in the total amount of 5 million dollars
10.6.2005
Halal Communication Company, which provides satellite communication services, signed several long-term contracts for the rental of 3 television channels in a total amount of about 5 million dollars. These are three customers from Ukraine, who rent the services of the Amos 2 satellite.
According to David Polak, CEO of Space: "Space currently provides similar services to other countries in Europe, including: Ukraine, Romania, Hungary, Slovenia, Croatia and Bosnia. The company intends to enter additional countries in Europe and strengthen its presence in these regions. We continue to consistently increase the occupancy percentages of the satellite and expand the circle of users of the satellite services"
The company recently completed an issue of shares and convertible bonds in the amount of approximately NIS 158 million, which is the first step in raising capital for the purchase of the Amos-3 satellite. The Amos-3 satellite will replace Amos-1 and is planned for launch at the end of 2007.
The Space Company provides satellite communication services using the Amos 1 and Amos 2 satellites in Europe, the Middle East and the East Coast of the USA. Among the major clients of Halal-Communications in Israel: the Israeli government, the Broadcasting Authority, the Second Authority (Channel 2 and Channel 10), the Yes satellite television company, and Gilat. Among the major clients of Halal-Communications abroad: HBO, Telespecio, Antena Hungary and many others.
The company was founded in the early 90s as a joint venture of Israel Aerospace Industries, GSSC, H. Group. Mr. Vagilat (Eurocom Holdings Group has since bought Gilat's share in the company), and began its activity in the provision of satellite communication services in 1996 with the launch of the Amos 1 communication satellite developed and manufactured by the Aerospace Industry.
Amos 2 was launched at the end of December 2003, and began commercial operations in April 2004. This satellite serves customers in three service areas: Israel and the Middle East, Europe and the US East Coast.
Space-Communication establishes its hold in Romania with an annual activity volume of approximately 3 million dollars As part of a customer event with the participation of Minister of Foreign Affairs and Trade Ehud Olmert and the Romanian Minister of Communications - the company launched AMOS CLUB - an international customer club
31.5.2005
By: Avi Blizovsky
The space communication company (Spacecom), which provides satellite communication services through the "Amos" satellite network, has been operating for 5 years in Romania and sells services with an annual volume of approximately 3 million dollars in this market. The company has long-term agreements for distribution to cable centers with about 15 Romanian TV channels, and its clients include leading TV channels such as: MTV Romania, Telesport, HBO Romania, Bucharest 1, National TV and more.
Last Thursday, Halal-Communication held an event for its customers in Romania, in which it launched an international customer club called AMOS CLUB. The launch of the new customer club in Romania is another step in establishing the position of Communication Space in Central Europe in general and in Romania in particular, and points to the strategic importance that Communication Space attaches to this market. The event was held with the participation of the Minister of Industry and Trade Ehud Olmert and the Romanian Minister of Communications Mr. Zsolt Nagy. The event took place as part of the sixth meeting of the Israel-Romania Hi-Tech Forum of the Chamber of Commerce and Industry.
David Polak, CEO of Space-Communications, says: "Romania is a strategic market for Space-Communications, both because of the scope of the existing activity and because of the inherent potential in this market. Romania's expected entry into the European Union will open up opportunities for us for additional business activities, such as information services. These services, which so far have not been developed in Romania, are expected to gain momentum in the near future. Chalal-Communications continues to invest in the Romanian market and consistently increases its market share in it.
Communication space: revenues grew 7 times to NIS 37 million; The net profit jumped 8 times to NIS 3.1 million
Chalal Communications published an excellent first quarter report yesterday. The company has been enjoying the operation of the Amos 2 satellite for about a year, which it fully owns, and is almost fully occupied with the transmission capacity of the Amos 1 and Amos 2 satellites.
Compared to the corresponding quarter, the revenues multiplied 7 times and amounted to NIS 37 million, the net profit multiplied 8 times, reaching NIS 3.1 million. In addition, the company moved to a positive cash flow. The corresponding quarter is not representative, as the company only benefited from revenues from the marketing commission of Amos 1, which is owned by IAI.
In April 2004, the company began operating the satellite it owns, Amos 2, and the main income since then is from leasing the space segments. According to CFO Itzik Shniberg, the big money lies in this sector, as shown by the large operating profit in the first quarter - NIS 17 million, while in all of 2004 it amounted to NIS 23 million.
Even compared to the previous quarter, the company showed a 20% increase in revenue, but a sharp drop in net profit - this amounted to NIS 8.8 million in the previous quarter, mainly from financing income caused by the drop in the dollar exchange rate, on which all the company's activity is based.
Space Communications leases segments of space on Amos 2 to telecommunications companies in Israel and Europe and to the countries themselves, including Israel. The YES company is the main customer of Chaval, and accounts for almost a third of its total sales. The fear that Bezeq will, at some point, stop injecting cash and bear the burden of the satellite broadcasting company, appears in the company's reports, but does not make an impression on the management. According to Shniberg, "YES complies with its payment terms, which are no different from what is customary in the economy, and the space company does not see a problem with continuing the contract with YES."
Chalal Communication raised in the first quarter about NIS 160 million in bonds and shares. The company earmarked the proceeds of the issue to finance part of a $170 million investment in the newer Amos 3 satellite, which is supposed to replace Amos 1, which is out of service in 2008. Space Communications is currently controlled in equal parts (20.68%) by the Aerospace Industries, Eurocom, H.Mer and the Satellite Services Company. Halal is traded at a value of approximately NIS 310 million.
Space reveals: the operating profit of "Amos 2" in 2005 - 33 million dollars
This is a sharp jump in this profit, since in the first 9 months of 2004 the company recorded a pre-tax profit of approximately 9.5 million dollars
14.3.2005
By: Avi Blizovsky
Ahead of the first public offering of shares in the communication space, the company reveals the revenue forecast. According to the company's estimation, its revenues from the operation of the "Amos 2" satellite will reach the level of 2005 million dollars in 35, and will gradually rise to 42 million dollars in 2009.
The operating profit before depreciation and financing (EBITDA) will amount to 2005 million dollars in 33, and will gradually increase until it stabilizes at 35 million dollars from 2008 until the expected decommissioning of the satellite in 2016. This is a sharp jump in this profit, since in the first 9 months of 2004 the company recorded an EBITDA of only about 9.5 million dollars. Itzik Shniberg, CFO of Space Communications, points out that until the expected departure of Amos 2 from service, the satellite is expected to generate revenues of $470 million.
Schniberg points out that of these revenues, about 370 million dollars are at a relatively high security level, since they are anchored in long-term contracts. According to the company's forecast, the cash flow generated by Amos 2 will amount to only 5 million dollars in 2005, but is expected to grow to 15 million dollars in 2008.
In the years 2009 to 2011, the company is expected to repay its debt to the existing bondholders, and therefore the cash flow is expected to decrease substantially. Starting in 2012, the cash flow is expected to increase to 35 million dollars, the same level as EBITDA. Today is expected the institutional tender of the offering, in the framework of which the company hopes to raise 170 million shekels, before the raising through the options. As part of the current capital raising, the company is expected to issue shares to the public for the first time.
Chalal will sell a package that includes bond shares and options, and the auction will be conducted on the rate of interest inherent in the bonds. The share price will be fixed and will be NIS 35. In this way, Halal hopes to raise NIS 110 million through the bonds and an additional NIS 60 million through shares. The exercise of the options will yield the company an additional NIS 50 million. The purpose of the fundraising is to finance the construction and delivery of the next satellite, "Amos 3", which is expected to enter into operation in 2008.
