Eutelsat: “Video prices stabilising”

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Equity analysts at investment bank Exane/BNPP held a meeting with Eutelsat’s Investor Relations team on May 20th and while little that was new emerged from the discussions, the satellite operator emphasised some key elements.

Top of the list was that in its all-important ‘Video’ division, transponder prices “are stable to growing,” according to the bank’s note to investors. “The revenue per transponder is however being diluted by the growth from lower priced EM transponders,” stated the bank. “Sky Italia (c€90 million of revenues) has staggered contract renewals coming up over the next 18 to 36 months.”

Exane/BNPP says that recent important client transponder lease and capacity renewals, including that of Poland’s TVN and the UK’s Arqiva, Eutelsat “has been able to grow the amount of revenues generated from these clients. We believe that the company should be able to at least maintain its revenues with its key client[s]. With an outlook for stable to slight growth in Video, capex efficiency increasing and given the high barriers to entry in Video DTH, Eutelsat has reaffirmed its view that its ROCE could expand in Video.”

The bank also reports that the prospects of a legal squabble – expensive and time-consuming – between Eutelsat and ViaSat has diminished and now looks “highly unlikely”.

The news helped lift Eutelsat’s share price on the Paris bourse by €0.50 to €16.31 a share (up 3.16 per cent).


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