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SES: “Time to forget 2015”

April 26, 2016

SES will unveil its Q1 results on April 29th. Giles Thorne, equity analyst at investment bank Jefferies, suggests that 2015 was definitely a year to forget given the slew of financial headwinds suffered by the satellite operator.

Thorne suggests that 2016 will start on a ‘solid footing’ but that growth for SES will be back-end loaded and will be flat (-1 per cent to +1 per cent at constant currency) but improving as the year unrolls helped by the launch on January 29th of its SES-9 craft. SES-9 will take around 5-6 months to reach orbit, so the second-half of the year will see its revenues starting to help profitability.

Jefferies says that SES’ 2015 Achilles heel was its ‘International’ division, and lost Governmental business, and Foreign Exchange challenges which lead in some cases to contract re-pricing. Jefferies says that these could still mean y-o-y negative growth of a miserable -7.4 per cent.

Europe’s cash-flow should be rock-steady and the bank sees no obvious contract ‘wins’ or ‘losses’, but it should all translate to a positive 2.9 per cent growth.

Thorne says that O3b, in which SES is the largest shareholder, should also figure in the quarterly statement “following the substantial equity issue request it made as part of its AGM.”  SES has frequently suggested that any consolidation of O3b will happen in 2016.

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