Fresh from its oversubscribed capital raising, space-bound Sky and Space Global (ASX: SAS) has told the market it has generated its very first revenues.
Just last week, SAS raised A$10 million from institutional investors and has opened the door for retail investors to participate in a share purchase plan to raise a further A$5 million.
The purpose of raising around A$15 million is to facilitate the deployment of 20 Pearl nanosatellites and to move the company closer to achieving around $1 billion in annual revenue when its entire network is completed.
Unlimited sky and space for future growth
As a nanosatellite maker, SAS intends to utilise networks of small satellites sized no larger than a household appliance, to provide unique service coverage for telecoms companies around the world.
In an official regulatory filing, the company said that its ‘3 Diamonds’ constellation is now fully operational and generating its first revenues from existing customers.
The company said that “revenues are expected to ramp up” to approximately A$1 million per year, from only the current customer base that has signed up to SAS’s 3 Diamonds project.
By inference, this suggests that SAS could improve on its initial forecast over the course of this year if the company manages to secure additional commercial interest and clientele.
Just last month, SAS secured a binding 5-year deal with Universal Cyberlinks, a prominent telecommunications provider in Ghana.
The deal will see SAS provide the necessary infrastructure for Universal Cyberlinks to be able to raise its operational coverage in remote areas and to attract significant amounts of new retail customers.
Having developed the 3 Diamonds project over the past few years, SAS confirmed that after extensive testing, the constellation was now “fully operational”, a major technical achievement for the company and potentially a springboard to more commercial partnerships later this year.
To provide further detail of its accomplishment, SAS said that its constellation was “evenly spaced in one singular orbit approximately 700km apart”, having undergone months of proof of concept testing across several functionalities, including phone calls (VoIP), machine-to-machine, instant messaging and push-to-talk services between different locations.
Future sky and space
Moving forward, SAS plans to add to its nanosatellite network by launching more satellites to be assimilated into the broader network.
In the meantime, the focus is to close new material telecommunications and data management binding contracts for delivery of narrowband services from the Equatorial Constellation.
SAS also said that it plans to conduct more field tests for the remainder of 2018 and confirms that it is on track to complete its first launch of the “Equatorial Constellation Pearl nanosatellites” during Q1 2019.
Eventually, the aspirational nanosatellite developer hopes to deploy 200 nanosatellites as part of a “full constellation” by 2020.
According to SAS, it expects to be generating significant gross revenues of around A$300 – $500 million per year once approximately half of its intended network (100 nanosatellites) is successfully launched.
At full capacity, SAS is forecasting revenues of around A$1 billion per year, if and when the entire 200-strong network is operational.
Currently, SAS is priced at $0.12 per share and valued at A$78 million by market capitalisation, with today’s news leaving its share price ticking up 2% in early morning trade.
“After all the hard work in the past six months, we are excited to see that the 3 Diamonds are performing better than expected and are already starting to generate revenues, even though they were only meant to be technology demonstrators,” said Mr Meir Moalem, Managing Director of Sky and Space Global.
“This proves not only that our technology works, but also that our business model is profitable and that there is a significant demand for the narrowband connectivity services that we are offering,” Mr Moalem added.