Intelsat under pressure
October 30, 2014
By Chris Forrester
Intelsat’s Q3 numbers showed the operator is still under pressure with quarterly revenues falling from $651.8 million last year to $608.6 million (down 6.6 per cent year-on-year) in the three months to September 30th. There were revenue falls in all of Intelsat’s key divisions, including its all-important Network Services which registered a fall in revenues of some $12 million, and Media which fell $5 million. However, its ‘Government Services’ saw the largest drop ($24 million) which reflected the cut-back and sequestration reductions imposed over the past year or so.
Despite these pressures, some of which are outside Intelsat’s direct control, the operator delivered EBITDA levels of near-80 per cent, although its contracted backlog also fell back some $200 million to $10.1 billion. Intelsat Chairman and CEO, Dave McGlade, said, “While our third quarter revenue of $609 million reflects the current environments for our African network services and our government businesses, we continue to demonstrate our ability to deliver attractive Adjusted EBITDA margins. At $485 million, or nearly 80 per cent of revenue, our robust margins contribute to strong cash flow generation.
“The successful launch of Intelsat 30 represents a return to the launch pad after nearly a year and a half, the first of a series of launches over the next 18 months that will result in a significant enhancement to our marketable capacity. In advance of these launches, we are working on critical elements of our service offerings to ensure that we have access to unique technologies and capabilities that will enable new services on our network. These services will position us to address much larger end-markets than today, particularly in the areas of broadband infrastructure, mobility and new media applications.”