Korean satellite imagery company Satrec Initiative (KOSDAQ: 099320) on November 12th posted record revenue in Q3 of 75.4b Won ($53.6m). This represents 57% quarter-on-quarter increase. However, such record high revenue did not translate into large profits for shareholders. Q3 operating profit stood at just 784m Won ($560k). This may explain why the stock traded flat on the following day on November 13th.
Satrec Initiative’s revenue growth appears fueled solely by satellite hardware sales, not imagery. Year to-date, 96% of Satrec’s revenue is from satellite sales. Imagery sales through subsidy SIIS appear on track to end 2024 totaling approximately 6 billion Won ($4.3m), similar to Satrec’s 2023 SIIS revenue.
And Q3 provides further evidence that Satrec Initiative’s global position continues to erode. Satrec’s international revenue, which once contributed 68% to its total revenue, now stands at just 6.6% year-to-date. Fortunately for Satrec, Korea’s domestic space economy is booming due to strong government investment. But Satrec losing international competitiveness means it has become fully reliant on the Korean domestic space economy to sustain its business.