Eutelsat squeezed by 9% revenue fall

Eutelsat has reported a 9.3 per cent fall in Q1 reported revenues to €349 million (although 6.7 per cent when ‘like for like’ numbers were measured) and including a 11.7 per cent tumble in in its ‘Fixed Data’ division compared to Q1/2016. However, these numbers were very much in line with market expectations, and only just below a consensus of €351 million..

Video revenues were flat with a 0.8 per cent fall (from €226.5 million last year to €223.3 million in Q1/2017-18). The market for Professional Video was said to be “tough”.

The fall was not helped by last year’s Q1 buoyant position because of termination revenues received from channels pulling their services off Eutelsat (notably tv d’Orange). Future prospects on Video are better and will be helped by an improving revenue picture on its Hot Bird orbital slot where five transponders are now being sold with a new rate-card pricing structure. Prospects have also been impacted by a delay in the launch of its ‘Konnect Africa’ broadband service which now slips back to 2019-2020 (the YahSat-3 satellite which supplies the capacity will not launch until Q1/2018).

Rodolphe Belmer, CEO, commented: “First Quarter revenues were in line with our expectations. Our key operational metrics were well oriented with a further rise in HD penetration, a stabilisation of the Backlog and an improved Fill Rate on a quarter-on-quarter basis. The autumn renewal campaign with the US Government yielded a favourable outturn, at some 95 per cent in value while the outcomes of Video renewals during the quarter were positive, notably with Polsat on Hot Bird. Elsewhere we took further measures to optimise Video distribution with the absorption of Noorsat in the MENA region.”

Channel count grew by a very healthy 6.6 per cent – since last year –  to 6,755 channels, and HD channels grew from 14.8 per cent of that total to 17.9 per cent (to 1210 channels from 940 last year). But the decline in video revenues only showed that the average price per channel (or per MHz) carried has also fallen over the past year.

Eutelsat’s all-important contractual backlog fell back from €5.4 billion to €5.2 billion, and representing some 3.5 years of business. Eutelsat’s Video division represented 86 per cent of the backlog.

The operator’s guidance for this full year (2017-2018) is for a further fall of -1 per cent to -2 per cent in revenues, and with a return to “slight growth” from 2018-2019, and helped by its broadband-for-Africa initiatives.

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