Rupert Pearce, CEO of London-based Inmarsat, told investors on March 9th that the satellite operator would cut its dividend from 54 cents (in 2016) to 33.6 cents for the past year, to permit the company to place resources behind its growing In-Flight communications and entertainment business. Inmarsat warned that next year’s dividend (that is for the current trading year) would fall to 20 cents per share.
Inmarsat’s traditional business is in providing connectivity to ships and oil rigs (40 percent of revenues), as well as aircraft and it is the airline business where the company’s investment and capital expenditure is going, and which grew revenues 45 per cent last year (to $598.7 million).
“We are well placed to continue to capture significant additional medium-term growth opportunities available to us, particularly in-flight connectivity,” Pearce said.
For the full year to the end of December, Inmarsat reported a 5.4 per cent rise in revenue to $1.4 billion. Its pre-tax profit fell by 23 per cent to $229.8 million.