Satcom Systems: A large agreement in the amount of NIS 40 million – the capital market

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Satcom Systems
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It is reported this morning that the subsidiary Gilat Telecom has signed an agreement with a government company in Israel in a framework agreement for the provision of equipment and satellite communication services for 3 years in the amount of NIS 40 million.

According to the report, this is a continuation of the previous agreement, which amounted to NIS 37.5 million for 4 years, which ended recently, after utilizing about 80% of the scope of the transaction.

This is a material agreement for the company, which is traded at a market value of approximately NIS 63 million, and at a price of NIS 10.65 per share.

According to the company: This indicates “the stability of the activity, the high customer needs and the quality business relationship that prevails between the parties. The new framework transaction includes a significant increase in the scope of the framework, as well as an expansion of the product and services required by the customer.”

The company qualifies the notice and says that the customer is not actually obligated to purchase or order the service and that any order will be conditional on the customer’s needs, but estimates that the scope this time will probably be used no less than in the previous agreement.

Satcom is engaged in linking and infrastructure services to the Internet and internal corporate data communication networks, along with mobile communication services via satellite. The company operates mainly in Africa but also in Europe, North America and Asia.

Decreased revenue increased in EBITDA
In the third quarter of 2020, the company reached EBITDA of approximately $ 6.1 million – an increase of approximately 50% compared to the corresponding quarter. The backlog stands at approximately $ 57.6 million by 2024. The company’s revenues in the quarter amounted to approximately $ 12.5 million, a significant decrease compared to the corresponding quarter then revenues amounted to $ 15 million. The bottom line loss was $ 260,000 compared to $ 400,000 in the same quarter last year.

Revenues from the communications services segment accounted for approximately 85% of the Company’s revenues for the period, similar to the segment’s revenues in the corresponding period last year. Revenue from the mobile satellite communications segment accounted for approximately 15% of the Company’s revenue for the period, similar to the segment’s revenue for the corresponding period last year (for the full article).