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Intelsat reported reduced revenues for Q1 (period to March 31st) of $628.9 million, down from $655.1 million y-o-y and not helped by falls in all of its key revenue centres. Network Services fell back 3 per cent from last year’s $298 million to $290.2 million. Media-related capacity sales also fell 1 per cent, from $223.2 million to $221.8 million, while Government services saw the biggest decline (13 per cent), from $125.8 million to $108.9 million.
Intelsat’s average fill-rate was steady at 77 per cent, spread across 2,175 transponders, while the operator’s all-important backlog of contracts also suffered, down from $10.1 billion on December 31st 2013 to $9.9 billion.
However, there were also falls in the cost of sales and other operating expenses which helped Intelsat maintain its EBITDA position of $498.7 million ($498.7million a year ago).
Intelsat CEO, Dave McGlade, said, “Intelsat performed to plan in the first quarter, generating strong Adjusted EBITDA margins and free cash flow from operations. Mobility applications, such as aeronautical broadband and maritime, are generating growth, but total revenue continues to be challenged by reduced US government spending and pricing pressure on network services applications in Africa.”
“In other parts of our business, we continued to support regional media customers with distribution services and digital terrestrial television platforms. We expanded distribution agreements with leaders in the maritime sector, building on our leadership position in broadband mobility solutions. We ended the first quarter of 2014 with a contracted backlog of $9.9 billion, providing visibility into revenue and cash flow.
McGlade added: “Our satellite programs remain on track, with our single 2014 launch, Intelsat 30, expected to launch in the third quarter. With the benefits of strong Adjusted EBITDA margins, lower than average lifecycle capital expenditures and reduced interest costs producing strong cash flows, we remain committed to our two-phase investment thesis and the target to de-lever our
balance sheet in 2014 by approximately $400 million, as forecasted in our February guidance.”