C-COM Satellite Systems’ revenues fell more than 30 per cent in the second quarter compared with a year earlier due to continued “sluggish market conditions” driven by fears of a looming recession and “anxiety related to geopolitical tensions,” the firm says.
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C-COM Satellite Systems’ revenues fell more than 30 per cent in the second quarter compared with a year earlier due to continued “sluggish market conditions” driven by fears of a looming recession and “anxiety related to geopolitical tensions,” the firm says.
C-COM reported revenues of $2.6 million in the three-month period ending May 31, down from $3.7 million in the second quarter of 2022.
The Ottawa-based company, which makes mobile satellite antenna systems that can be deployed automatically, turned a profit of nearly $342,000, or one cent per share, in the second quarter. That’s down slightly from net income of $369,000 in the same period last year.
In financial documents filed Tuesday, C-COM’s management said the firm continues to feel the effects of the war in Ukraine.
“The company has experienced the effects of supply chain disruptions, shipping delays, inflationary price pressures and the inability to sell to its Russian based resellers as a result of this conflict,” it said.
“Delays in the global supply chain and scarcity of materials may impact the company’s ability to secure the materials and components required to meet customers’ needs and contractual obligations.”
While C-COM noted that its second-quarter sales were a “significant improvement” over the previous quarter, when it generated just $680,000 in revenues, it said macroeconomic challenges, along with the impact of the war, continue to dampen its recovery.
“Despite Q2’s decent performance, C-COM is still experiencing challenges related to growing geopolitical tensions and the aftereffects of the pandemic: global inflation and fear of recession,” it said. “The C-COM management team is using their best efforts to mitigate these conditions.”
The firm said it has cut expenses in an effort to blunt the impact of a potential economic downturn, adding its “balance sheet remains healthy and our existing inventory levels should allow us to continue to quickly respond to demand for our systems.”
Meanwhile, the company boosted its spending on research and development to more than $485,000 in the second quarter from $176,000 a year earlier.
CEO Leslie Klein said C-COM has been making “good progress” on the electronically steered, phased-array antenna system it is developing with researchers at the University of Waterloo.
The company says the system will be designed for cars, trains, tour buses and other vehicles used by customers such as emergency responders, medical services and police forces that benefit from “always-on” connectivity.
The technology can also be used on planes, drones and maritime vessels. The firm predicts the global market for such systems could reach $17 billion by 2031.
“C-COM is in the final stages of development of this technology and will be benefiting from this massive growth opportunity,” the company said.
In a statement, Klein said he remains “cautiously optimistic” about the company’s prospects.
“The need for emergency communications and cellular backhaul has been growing,” he said, adding the company anticipates “improved demand” from customers in the energy and oil and gas exploration sectors.
C-COM shares fell 21 cents to finish below a dollar on the TSX Venture Exchange Tuesday, ending the day at 96 cents. The company’s stock has shed more than 30 per cent of its value since the start of 2023.
