The world’s ‘Big Three’ satellite operators (SES, Intelsat and Eutelsat) are all under pressure with their revenues and profit margins squeezed and anxieties over their ability to continue to stay relevant in a world where threats from broadband and data incomes threatened by a highly competitive market.
SES has suffered badly, with a further 2.3 per cent fall in share price on November 8th and overall a value crash this year of almost 39 per cent, to yesterday’s depressed €12.80, its lowest share price since 2006. Its market capitalisation is now less than €6 billion, one-third of its value back in 2015 (when its share price stood at almost €33).
The share price collapse is related directly to market anxieties over how the SES business is being run, and including in its short-term ability to resolve problems at its MX1 playout and facilities business. Various investment bank reports over the past week or so have commented unfavorably on future prospects – at least for the short-to-medium term – for the company’s profitability, and with questions over the operator’s ability to maintain dividend payments.
But CEO Karim Michel Sabbagh is on record as saying that SES is going through a necessary period of transition and that the business is undertaking this major shift towards longer-term profitability. SES is also helped by having the Luxembourg state as a significant investor, and the SES board of directors are understood to be firmly behind the key business decisions made.