Things are improving slowly for Patrick Biewer and LuxGovSat in a market where winning new customers is complicated even against the backdrop of war, which has boosted demand. Photo: LuxGovSat

Things are improving slowly for Patrick Biewer and LuxGovSat in a market where winning new customers is complicated even against the backdrop of war, which has boosted demand. Photo: LuxGovSat

LuxGovSat ended 2022 with a new loss of €1.7m, adding to the €46m it has already lost since its creation in 2016. But the situation is improving: the joint venture between the state and SES is confident that 2023 will be its first profitable year.

On stage at the GovSatCom 2023 conference centre at the end of February, LuxGovSat CEO perhaps got a little ahead of himself. According to the story told by LuxTimes in mid-March and never denied, the joint venture between the state and SES had enjoyed its first year with positive financial results.

“We never said it like that,” the head of communications now qualifies. She adds that the last quarter was particularly good--meaning profitable--and that 2023 will be profitable, with the company targeting 20% growth.

The results for 2022 show a 3.9% increase in sales to €26.9m. By reducing its operating expenses by more than €2m, the company is limiting its losses to €1.7m, on top of the €46m already lost to date. But the good news is that Ebitda is still leaping ahead, rising from €4.7m in 2020 to €8.7m in 2021 and €11.8m last year.

A market in the throes of change

Looking beyond the figures, the company acknowledges in the risk analyses in its annual report that “the emergence of new technologies is driving rapid change in some of the company’s markets.”

“GovSat-1 is a wide beam satellite that is not as bandwidth efficient as commercial HTS satellites (although it is more secure). There is a risk that HTS will increase the premium for secure capacity to Mbps level. The increasing adoption and availability of multi-band terminals (allowing the use of both commercial and military frequencies on the same terminal) may drive the bulk of traffic demand from these terminals towards cheaper and more widely available commercial FSS capacity, while demand for more secure capacity may be limited to the critical situation only,” it reads.

As co-shareholder in LuxGovSat along with the state, SES can have it both ways with its and its new strategy, which has seen it rebrand its subsidiary Redmond, SES Government Solutions, into SES Space & Defence. Above all, this has the merit of being clearer about its desire to win market share in the US defence market.

“Don’t panic,” says an informed observer, “there will be customers who are perhaps less advanced or less wealthy, or whose needs are inferior, and who will want to acquire military communications capabilities ‘offered’ by LuxGovSat.”

This story was first published in French on . It has been translated and edited for Delano.