SES targets: Banks get nervy

Satellite operator SES unveils its latest Q3 numbers on November 8th, and there are worries amongst the investment community as to currently how profitable SES is.

The problem is that if its Q3 numbers grow by about four per cent , a perfectly healthy number when compared with some of its rivals. However, if SES is to maintain its end-of-year financial guidance it means that for the 3 months to December 31st –this current trading quarter – it must achieve 7.5 per cent  growth. And that might be a battle given the number of challenges it, and its rivals, are facing.

For example, SES has lost around €6 million in revenue from technical problems on its AMC-9 satellite (which serves North America). This Q3 loss can be balanced by a gain (of some €5 million – €6 million) from new DTH services for Brazilian pay-TV supplier OI, and there have been other satellites launched over the past twelve-months which should also help the revenue picture.

However, the revenue target for Q3 is €473 million (and 9-month revenues of €1383 million). Investment bank Morgan Stanley says: “To make our Full Year 2013 forecasts and our three-year recurring sales CAGR forecasts, SES must [make] 7.5 per cent underlying sales growth in Q4 (up from +2.8 per cent  in 9Q13 and 4 per cent  in Q3) and 6.5 per cent  sales growth in FY14. At the EBITDA line, SES must [achieve] 13 per cent  growth in Q4 and 6.5 per cent  in FY14. This looks ambitious. Our estimates are the higher-end of guidance.”

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