Morgan Stanley: SES faces operational risks

Last week, satellite operator SES declared its full year 2012 results which were slightly below their original guidance to the market, with revenues not helped by further solar-array problems on its AMC-16 satellite (which is wholly leased to EchoStar) and a delayed approval of its EGNOS ‘super’ GPS cargo on SES-5.

Egnos is a European Commission initiative (European Geostationary Navigation Overlay Service) which is designed to improve the functionality of Europe’s Galileo/GPS systems. Europe is taking longer to deploy key ground infrastructure, and has yet to sign off Egnos’, or pay its bills!

The AMC-16 problems are now serious in that the satellite launched with 36 active transponders. It now has just 9 at the end of last year. The problem is on the craft’s solar array circuits, which SES stresses has not affected any other of the Lockheed Martin-built AMC-fleet (which operate over North America).

But the market also expressed concerns for what investment bankers Morgan Stanley suggest might be a year of “operational risks”. The bank’s team of analysts, led by Julien Rossi, suggest that SES has decided to mainly depend on launches from either the ILS/Proton system, or that of Elon Musk’s all-new SpaceX rocket (which has a key flight on March 1st).  The bank fairly points out that both launch systems have suffered delays, and “new launch delays are conceivable”.

The bank’s note to clients is much more positive about 2014, however, saying they expect new capacity to eventually kick in and start boosting revenue growth from the end of this year.

Upcoming SES launches:
SES-6, mid-March on ILS/Proton
Astra 2E, mid-June on ILS/Proton
SES-8, mid-June, SpaceX

Chris Forrester Posted by on Feb 25 2013. Filed under Guest Blog, Inside Satellite.

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