Korean satellite imagery company Satrec Initiative (KOSDAQ: 099320) on November 12th posted record revenue in Q3 of 75.4b Won ($53.6m). This represents a 57% increase from just Q2. However, such high revenue did not translate into large profits for shareholders. Q3 operating profit was just 784 million Won ($560k). Resultantly, Satrec Initiative stock traded flat the next day on November 13th following the release of Q3 financials.
Satrec Initiative’s revenue growth appears fueled solely by Satellite sales. Year to-date, 96% of Satrec’s revenue comes from Satellite hardware sales. Imagery sales through subsidy SIIS appear on track to end 2024 at around 6 billion Won ($4.3m), similar what Satrec posted in 2023.
And Q3 provides further evidence that Satrec Initiative’s global position is eroding. Satrec’s international revenue, which once contributed to 68% of total sales, stands now at just 6.6% year-to-date. Luckily for Satrec and its investors, Korea’s space economy is booming from government investment. But Satrec losing international competitiveness means it has become reliant on the Korean government for nearly all its business.