Intelsat still hurt by segment falls

Satellite operator Intelsat brought in revenues of more than $619 million during its Q4 trading (to December 31st) and helping drive overall revenues for the year to $2.472 billion, and its revenues were just ahead of its own expectations by $11.3 million.

Intelsat paid down $475 million in debt during the year. It managed an EBITDA margin for Q4 of a very respectable 77 per cent at $477.1 million, and finished the year with an all-important future contracted backlog of $10 billion, fractionally down on the September position of 10.1 billion..

Intelsat Chairman and CEO, Dave McGlade said, “In 2014, we were able to deliver strong Adjusted EBITDA and cash flow in a challenging environment, meeting our guidance targets on all metrics. We also completed a debt pay down of $475 million and funded investments in our network. However, the continuation of the trends we experienced in 2014, such as pricing pressures in certain regions and applications, reduced US government spending, and rising geopolitical challenges, compounded with services nearing the end of lifecycle, is creating ongoing headwinds for our business in 2015 and into 2016. We are taking action to counterbalance these trends, focusing our resources on laying the groundwork that will position us to return to growth as our new media satellites and next generation satellites enter service in mid-2016 and 2017.”

Intelsat’s key divisions, when separated, showed media-related revenues up 3 per cent during Q4, although fell back by 0.3 per cent for the year as a whole. Unfortunately its Government-related business struggled with a quarterly reduction of 14 per cent on the same period in 2013, and 17 percent for the year as a whole. Network services (46 per cent of total revenues) also fell back, by 5 per cent for Q4 and 4 percent for the year.

Intelsat’s guidance for 2015 is for media-related growth of 2-3 per cent, but for further declines in government business of another 8-12 per cent and further falls in Network services by about 7-10 per cent.

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