Eutelsat said that all the signs for 4K/Ultra-HDTV transmission were positive and encouraging, and expected signals to meaningfully start in the 2017-2018 timeframe.
Eutelsat also reported “stable” video revenues for its Q1 numbers (period to September 30th) with quarterly revenues up just €800,000 to €217.1 million compared with the same period last year. Eutelsat chairman/CEO Michel de Rosen reported that the flat performance was down to a lack of available incremental capacity even though channel growth was, by and large, excellent.
Specifically, Eutelsat said it continues to see extremely healthy channel growth at its 7-8 degrees West location (where it shares orbital location with Nilesat) and where video demand grew 17 per cent, up 101 channels to 688 channels during the previous 12 months. It was a similar story at 16 degrees East where channel growth was up 23 per cent, representing 137 new channels to a total of 728 channels.
“At September 30th 2013, the total number of channels broadcast by Eutelsat’s satellites was 4,713, up 7.0 per cent (+310 TV channels) year-on-year. 439 of these channels were in HD (from 379, or up 15.8 per cent), implying an HD penetration rate of 9.3 per cent compared to 8.6 per cent at September 30th 2012. Professional video revenues were slightly down as the first quarter of the previous fiscal year benefitted from additional demand for capacity generated by broadcasters and service providers delivering coverage of the 2012 London Olympic Games. Coverage of Russia will be further enhanced with the entry into service of Express-AT1 (at 56° East) and Express-AT2 (at 140° East) in the second half of the current financial year, on which 16 transponders have already been contracted to TricolorTV,” said Eutelsat.
While video revenues were flat, Eutelsat’s Data & Value Added Services (and which represent 20.7 per cent of overall revenues) showed mixed results. Data Services revenues fell back by 3.8 per cent to €43.2 million. However, Value Added Services, helped by growth of Broadband from its Ka-Sat craft, were up 42.4 percent to €23 million.
Mr De Rosen told analysts that discussions were continuing with rivals SES over the arbitration decision last month at 28.5 degrees East, although all Eutelsat transmissions – and revenues – from the former location had now ceased. Eutelsat is expecting to lose future revenues from the 28.5 location, and although hinted that it was not giving up the fight over 28.5 “but we will not comment one way or another”.
This revenue stream will also be further impacted by the legal settlement over the 28.5 deg East orbital position which means that around €20 – €25 million will be missing, effective October 4th, from this year’s overall revenues.
Eutelsat’s order and contracted backlog rose 3.9 per cent to €5.4 billion and represented more than 4 years of contract value. Mr de Rosen repeated the overall guidance for future trading which are expected to be around 2.5 per cent for this financial year, and 5 per cent for the two subsequent years.
Questioned on the increase in the number of TV channels overall (up 7 per cent) yet showing only flat video revenues, this implied that revenues per channel were down. “This reflects the industry transition towards MPEG2 and MPEG4 transmission,” said the company.
Eutelsat also confirmed that it is in dispute with France’s tax collectors over the 2012-2013 financial years. “The French tax authorities notified Eutelsat on December 20th 2012 of a total €27.5 million tax reassessments over a 3-year period. These were challenged by Eutelsat in view of the strong arguments held. On October 11th 2013, the company was informed that the French tax authorities abandoned certain of the reassessments for a total of approximately €5.5 million. The remaining reassessment was confirmed and Eutelsat continues to contest it.”
Eutelsat confirmed that it had brought into use its Eutelsat 25B/Es’Hail-1 craft (a joint-venture satellite with Qatar) on October 29th.