OneWeb’s Financial Hit Detailed10th Sep 2022
OneWeb, a satellite communications company headquartered in London, has been severely impacted by Russian action in 2022. Russia is punishing OneWeb for the sanctions placed on it after the Kremlin’s wide-scale invasion of Ukraine. The true extent of the damages could mean a £200m hit for the company.
OneWeb is constructing a mega constellation of Low Earth Orbit (LEO)-based satellites, which will provide low-latency, ultrafast broadband. However, the launch of 36 platforms was blocked earlier this year because of Russia’s invasion of Ukraine. The company has since confirmed that its accounts have taken a £199m hit as a consequence.
Here is an extract from the company’s 2022 Annual Report:
“The Group’s operating loss increased by 631% compared to the previous year after the impact of an impairment of $229.2 million. The impairment arose from the Russia-Ukraine war resulting in the postponement of a planned launch on 4 March 2022, the associated postponement of subsequent scheduled launches, the loss of satellites not returned to the Group, and the impairment of a portion of the Group’s prepaid launch insurance. The operating loss for the year excluding the effect of the impairment was $196.7 million.”
The company posted a net loss for the year ending 31st March of $390 million.Revenue totaled just $9.6 million. Their current committed order value is more than $300 million.
Where it all went wrong for OneWeb in 2022
Earlier this year, Russia took 36 of OneWeb’s spacecraft hostage, after launch plans were scuppered due to sanctions placed on the country.
The impairment happened after the British company cancelled a launch scheduled for March at a Kremlin-controlled launchpad based in Kazakhstan. Russia had demanded that Britain sell its stake in the company, which the UK government refused to do.
This resulted in the postponement of a number of planned launches. OneWeb then faced insurance expenses, and to make matters worse, the satellites were left in Russia’s hands.
It is not all doom and gloom, though, as OneWeb has since announced a merger with Eutelsat in a $3.4 billion deal.