Originally published by Space Intel Report on August 20, 2024. Read the original article here.

LA PLATA, Maryland — Space debris removal and satellite life extension service provider Astroscale expects 7-8% of the Eutelsat OneWeb satellites launched with its magnetic docking plates will fail in their attempts to deorbit on their own, resulting in Astroscale sending up debris-removal spacecraft to bring them down at a fee of $8 million to $13 million per satellite.

Rendezvousing with dead satellites and rocket stages in low Earth orbit is one of the two most-promising business lines for Astroscale, whose stock-market introduction in June was in part based on a quick ramp in revenue and profitability.

The second growth area is extending the life of satellites in geostationary orbit. Several companies, notably Northrop Grumman’s SpaceLogistics, are active in this market, with SpaceLogistics having succeed in extending the lives of two large Intelsat spacecraft.

How big the life-extension business will be is a subject of debate. The market for geostationary satellites has declined in recent years, and fleet operators are electing to consolidate their fleets with fewer satellites in geostationary orbit. These operators may be less likely to order life-extension missions.

Second, satellites using electric power or their orbital maneuvers do not run out of propellant so quickly, making life extension less compelling than for conventionally fueled satellites.

In an Aug. 19 investor presentation, Astroscale said it forecasts 20-30 large GEO-orbit satellites to retire per year in the coming years, and that the company is targeting 1-2 life-extension contracts per year once its LEXI-P mission demonstrates the technology.

Astroscale has a preliminary agreement with an unnamed customer for LEXI-P, with a future contract estimated at $121 million.

In the investor call, Astroscale Chief Financial Officer Nobu Matsuyama said the life-extension business has a revenue potential of $121 million to $215 million per mission.

As of Aug. 19, 568 satellites in low Earth orbit carry Astroscale magnetic docking plates, most of them OneWeb spacecraft in a 1,200-kilometer orbit — too high for them to count on orbital decay to bring them into the atmosphere. The first 102 of these satellite were launched in 2021 with five- to seven-year operating lives, meaning they will start deorbiting in 2026.

A 7.5% failure rate would mean 42 of these satellites will be customers of Astroscale for an active debris-removal mission. At an average of $10.5 million per mission, that’s $447 million in revenue.

Astroscale has recently delivered on two major contracts the company had promised investors during the stock-market introduction.

The first is the ELSA-M Phase 4 mission with the UK Space Agency and the European Space Agency (ESA) to remove a failed Eutelsat OneWeb satellite. The contract, signed in July, is valued at 11.78 million British pounds ($15.3 million) and scheduled for 2026. Eutelsat OneWeb is co-funding a portion of this mission as part of a public-private partnership with the 22-nation ESA.

The second mission, signed Aug. 20 with Japan’s Jaxa space agency, is for the ADRAS-J2 mission to target, rendezvous and attach to a piece of debris in low Earth orbit and bring it to a lower altitude, from where it will burn up on reentry into the Earth’s atmosphere. The contract is valued at 12 billion Japanese yen, or $81.9 million, with the mission to occur by March 2029 after the removal from orbit of a Japanese rocket’s upper stage.

The predecessor mission, Adras-J, was to perform rendezvous and proximity operations with the debris, which is 11 meters long, 4 meters wide and weighs about 3,000 kilograms. Adras-J performed three 360-degree inspections of the stage from a distance of 50 meters.

Matsuyama said the Elsa-M and Adras-J2 contracts give the company confidence in its revenue and profit forecasts.

The company reiterated its goal that project revenue in the current fiscal year would reach 18 billion yen, or 37 times revenue in the previous year.

Matsuyama said the company has sufficient cash to reach free-cash-flow break-even and will not need to raise new equity.

The current fiscal year will be a transition for Astroscale. R&D spending is expected to peak before declining to more sustainable levels as the company deploys technologies already developed for commercial missions.

“We are aiming to achieve close to gross-profit break-even in this fiscal year and operating profit next year,” Matsuyama said.

Astroscale Chief Executive Nobu Okada said the company’s goal is to pioneer a value chain for space sustainability, “which enables a circular economy in space.”

The business model starts with stricter government regulations regarding end-of-life removal of satellites. The regulations government investment in technology-demonstration missions, which in turn encourage private investment and space-sustainability clauses in satellite insurance programs.

“Government support is going to be essential in an early-stage business like this,” Astroscale Chief Commercial Officer Chris Blackerby said during the investor call. “Clients right now are primarily government customers, but this is just the baseline into a commercially viable service going forward.”

Originally published by Space Intel Report on August 20, 2024. Read the original article here.