On March 21st, London-based speciality operator Avanti Communications expects to see its Hylas 4 satellite launched on an Arianespace rocket. With a successful deployment Avanti can start expecting to earn some revenues from the satellite and new clients during the second-half of this calendar year. It badly needs the money.
A results statement issued after the markets closed on March 1st made miserable reading. Revenues for the six months to December 31st fell back dramatically, from $32.3 million (for the same period in 2016) to just $20.2 million.
Losses rose (pre-tax) to $85.6 million from $62.6million. Avanti has just $47 million available cash (as at February 19th 2018, and net debt of $729 million at December 31st ($562 million as at June 30th last year). Its order book ‘backlog’ has fallen more than 20 percent in the past 6 months, from $104 million to $84 million.
“There was a significant increase in the finance expense during the period as the business had higher debt compared to the 6 months to December 2016. It is worth noting that finance expense is expected to significantly decrease in the last quarter of this financial year following the completion of debt restructuring,” the satellite operator said.
Those finance costs, needed to pay its high debt interest rates, came in at $56.8 million, up from $34.7 million a year earlier. Those finance costs will now start reducing because Avanti has restructured most of the debt into equity. Avanti has called a ‘General Meeting’ on March 16th to consider outstanding items from the AGM held last December.
“With new satellite launches pending we continue to target medium term revenue growth as previously guided. Growth in the current year has been limited by the financial disruption that existed in the first six months. With the confidence delivered by the announced restructuring, revenue in the second half is expected to improve,” said a company statement.