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SES, Eutelsat and Intelsat all face challenges

We are in ‘results season’ as far as the world’s three largest satellite operators are concerned. As a consequence investment bank Jefferies’ has issued a major report on the state of the satellite industry.  Intelsat is considered to be market leader, just ahead of SES with Eutelsat in third-largest position.

The bank’s Giles Thorne says while SES and Eutelsat should “be solid” in their results, “Intelsat’s fundamentals remain entrenched” and the bank isn’t expecting much from the industry’s Number 1 player. First up is Luxembourg based SES which will issue its results on April 30th, as does Intelsat. Eutelsat follows on May 12th.

SES, says the bank’s report, is expected to maintain its modest guidance for the year ahead, and 1Q15 group revenue forecast of €484.8 million equates to reported growth of +4.1 per cent yoy, and -4.0 per cent on a constant currency basis (from +2.2 per cent / +1.7 per cent in 4Q14 / 3Q14).  As touched upon, the slowing growth comes from Europe mostly (revenues for the quarter-year down €19.9 million to €240 million), but also International (also down to €175 million from €205.2 million). Not helping SES, suggests the bank, is a further decline in its North American business. Revenues from its TV/cable business remains steady enough, but the bank questions whether the US Government’s “sequestration” cut-backs will now start affecting overall revenues.

Intelsat’s numbers, also out on April 30th, will be the first time that its new CEO Stephen Spengler gets a chance to present to analysts and press. Jefferies say that Intelsat is in a period of “structural malaise as it works through the headwinds of over-supply in Africa – although the bank expects the worst to be over (as far as Africa capacity sales are concerned).  The bank says that growth in terms of Intelsat’s media-related business should benefit from the launch of Intelsat-30 in October last year. Overall, Jefferies expects Intelsat’s Q1 total revenue numbers to be some 3.6 percent lower at $606 million ($628.9m same period last year).

Finally, Eutelsat Q3 numbers will be issued on May 12th (Eutelsat’s end of year is at the end of June). Highlights, as far as the bank is concerned, will be the growth of its SatMex/Eutelsat Americas division, which the bank suggests will contribute €33 million (for Q3 sales) to Eutelsat’s revenues, and well ahead of the same period last year when revenues were just €25.4 million. Overall, Eutelsat’s Q3 revenues should expand 6.9 per cent to €365.7 million (from Q3 last year of €342.2 million).

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