Reduced spending by customers in the oil and gas industries, as well as “desperate price-related competition,” caused revenues and profits to drop for C-Com Satellite Systems in its most recent fiscal year, the Ottawa-based aerospace firm said Tuesday.
C-Com (TSX-V:CMI) develops, manufactures and deploys commercial satellite antenna technology that enables high-speed Internet, VoIP and video services into vehicles. It’s particularly focused on remote areas, such as the far north in Canada and Russia as well as deserts in Australia and Saudi Arabia.
In regulatory filings, the company said 2016 was “an exceptionally challenging year” for niche players such as C-Com as well as the broader satellite communications industry.
The Ottawa-based firm said its full-year revenues for the 12 months ending Nov. 30 were down 10.7 per cent to $9.3 million. The decline weighed down the company’s profits, which fell 36 per cent to $1 million.
C-Com blamed the lower revenues primarily on the slowdown in purchases from oil and gas exploration companies, particularly in North America and the Middle East.
“The company has delivered positive results under the current challenging and adverse global economic conditions, which have affected many of its international customers,” C-Com president and CEO Leslie Klein said in a statement. “A worldwide economic slowdown, unforeseen political turmoil in key regions, severe exchange rate fluctuations, and a sharp fall in oil prices, all have forced some of C-COM's larger customers to delay projects and postpone purchases, resulting in lower-than-expected sales.”
Looking ahead, the company said it’s engaged in R&D of next-generation antenna technologies with the University of Waterloo that’s designed to be compatible with 5G networks.
While C-Com didn’t offer any guidance for its earnings over the coming year, it ended its 2016 fiscal year with its strongest performance in six quarters.
Revenues were up 29 per cent year-over-year to $2.9 million. Net income, meanwhile, was up 59 per cent to $666,296.
C-Com stocks were up three cents, or 2.9 per cent, to $1.06 per share in late afternoon trading.