exactEarth kicks off ‘strategic review’

December’s IridiumNEXT launch took exactEarth’s orbiting payload total to 25; next flight is scheduled for March (Iridium)

25 January 2018

Vessel tracking specialist exactEarth has set in motion a “review of strategic alternatives” that could end with a refinancing, sale of assets or even sale or merger of the Ontario, Canada-based company whose expertise is in satellite reception of ships’ AIS location beacons. Addressing analysts on the release of financial results for the year to 31 October, neither chief executive Peter Mabson nor chief financial offier Sean Maybee would elaborate except to say a review committee chaired by board director Eric Zahler, who is also managing director of private equity firm Sagamore Capital, would “engage a financial advisor in the coming weeks”. No timetable has been set for the review process and in its statement exactEarth adds that it “does not intend to provide announcements or updates unless or until it determines that further disclosure is required by law”.

The review follows a year which saw revenue, including from the Canadian government, fall 32% to C$12.8m and gross margin more than halve, to C$4.2m. But with non-cash impairment charges of C$26.9m against property, plant, equipment and intangible assets, exactEarth closed its 2017 financial year with an overall loss of nearly C$34m. The 2016 figure was slightly worse, at C$35.6m after similar charges. For 2015 and 2014, losses were C$1.3 and C$3.8 respectively.

Mabson, however, is bullish about prospects. As of now, exactEarth has 25 payloads in orbit delivering “actionable data” on 250,000 vessels accounting for 90% of intercontinental trade. Trials of the exactTrax small vessel tracking service are underway, and Mabson expects to sign operational contracts in fiscal 2018.

In orbit are 18 of its Harris-built “exactView Real Time” AIS detectors flying as hosted payloads on IridiumNEXT spacecraft, the most recent launch being by a SpaceX Falcon 9 rocket in December, and seven of its first-generation exactView units – with another 13 RT payloads in orbit but not yet operational. Thus, he expects to have a functional constellation of about 30 RT payloads operating around the end of the second quarter – even without taking into account the 10 RT payloads set to fly with the next Iridium launch on 18 March.

And, he adds, another AIS payload will be orbited in February, carried by the PAZ radar satellite; PAZ, for Spain’s Earth observation programme, is owned by Spanish government satellite services operator Hisdesat, which is exactEarth’s biggest shareholder.

Mabson told analysts that he believes RT to be the “gold standard” service, promising the ability to track vessels even in crowded regions, with rapid data updates. The IridiumNEXT satellites carrying exactEarth’s AIS payloads should fly reliably for 15 years. And, he says, the Harris payloads carry software that can be updated to improve service over the years.

The number of customers – government and commercial – is growing, says Mabson. But, he notes, the competitive environment is changing, with “two main players” and an emerging third.

Who is main and who is emerging may be open to question, but the names to watch are exactEarth, San Francisco-headquartered Spire, and Aerial & Maritime, of Denmark.