Kudelski posts H1 loss
August 17, 2017
In the first half 2017, the Kudelski Group, a provider of media content protection and value-added service technology, grew consolidated revenues by 12.7 per cent reaching $545.7 million, while delivering $6.7 million operating profit, a decline of $27.3 million compared to the first half 2016.
The structural change of the markets in which the Group is active has accelerated during the first half 2017. While demand for cybersecurity, Internet TV and Internet of Things solutions is strongly increasing, especially in the US market, demand for traditional Digital-TV solutions is weaker due in particular to subscriber losses at several traditional European pay-TV operators. This market evolution has shifted the geographical revenue mix, with an increasing importance of the American region primarily driven by cyber security and public access, compensating for the weaker demand for legacy Digital TV solutions, especially in Europe.
The integrated Digital TV segment (iDTV) grew its topline by 12.9 per cent to $387.3 million, with operating income of $13.1 million compared to $43.1 million in the first half 2016. In the Group’s core digital TV business, the saturation of traditional pay-TV offerings in developed markets resulted in decreased revenues, particularly in Europe where several established pay-TV operators continued to lose subscribers. However, the Group was able to further develop its intellectual property (IP) licensing activities in the first half 2017 by entering into additional patent licensing agreements.
Revenues from the cybersecurity business gained strong traction in the first half 2017. However, the Group also widened its losses from this business, as it continued to invest to develop its technology portfolio in areas such as Internet of Things (IoT). The Group successfully integrated M&S Technologies, a Dallas-based cyber and network security provider acquired in January of this year. This acquisition, together with the organisation built organically, provides a strong platform for the deployment of the Group’s proprietary cybersecurity technologies and managed service capabilities.
In the Public Access segment, revenues grew by 12 per cent over the first half 2016, which represents a strong result considering the growth of over 50 per cent in the previous first half-year. Public Access operating profits were also higher, reaching $1.5 million compared to $0.2 million in the first half 2016.