Intelsat: Flat revenues. IPO plans?

Companies tend not to use formal quarterly announcements to talk about any upcoming plans they might have for an Initial Public Offering (IPO), but Intelsat, the world’s biggest satellite operator, used its Q3 results to explain some key advantages. CEO Dave McGlade told analysts that the recent hurricane had not damaged any of Intelsat’s East Coast teleports.

Intelsat has had a busy year. Earlier this year it sold its HQ building at 4000 Connecticut Avenue in Washington DC for a healthy $85 million, and on November 5th it explained that it had used much of the cash to acquire the remaining 25.1 per cent equity in its ‘New Dawn’ joint-venture satellite (for $8.7 million), and paid down $82.6 million of debt that the j-v still had on its books. In other words it has converted a nice asset but one with zero income into a – now wholly-owned satellite – that can continue to earn good revenues. Intelsat isn’t homeless, by the way, it is now leasing back the HQ building but is looking for cheaper digs.

Intelsat has also been busy launching new satellites during the year. Intelsat-19 was launched in June (although with a damaged solar panel), Intelsat-20 launched in August, Intelsat-21 also launched in August and Intelsat-23 launched in October. Intelsat’s all-important fill-rate was 77 percent on about 2135 transponders, up 50 on the previous quarter-year.

Total revenue for the three months ended September 30th, 2012, increased by $2.1 million, to $654.9 million, as compared to the three months ended September 30th, 2011.

As to any IPO the market will have to wait and see, but the rumour mill suggests one is likely sooner than later. Intelsat has some outstanding debt due for repayment in February next year and while it could – no doubt – easily refinance that debt for another period, an IPO might just as easily solve the problem.

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