SES: “Solid” H1
July 26, 2019
Satellite operator SES has described its Half Year 2019 Results as “solid”, with continued revenue growth in Networks, strong control over cost and discretionary spending and important progress towards reshaping SES with the objective of delivering exceptional services and driving customer success.
Reported revenue was €961.4 million, down 5.1 at constant FX, with underlying revenue of €950.6 million; down 4.2 per cent. Video was down -8.8 per cent and Networks +5.0 per cent.
Steve Collar, President and CEO, commented: “We’ve had a solid first six months with financial results in line with our expectations, with continued revenue growth in Networks, strong control over cost and discretionary spending and important progress towards reshaping SES with the objective of delivering exceptional services and driving customer success.”
“Our Networks business continued to expand on the back of another strong performance in Mobility and Government while we’ve built further commercial traction that can support our Fixed Data business. Of note in H1, we’ve added again to our market-leading position in cruise – with more ships for Genting and the announcement of premium brand Ritz-Carlton; we’ve secured Teleglobal as an anchor customer for SES-12 in Indonesia; expanded connectivity services in Colombia and Brazil; while also restoring connectivity to citizens in Papua New Guinea following a major earthquake. With encouraging levels of demand across our Networks segments, I’m looking forward to the contribution from the additional O3b satellites, which very recently came into operation, as well as being that much closer to the launch of O3b mPOWER in 2021.”
“While the market environment in Video remains challenging, we’ve delivered value to customers across our core neighbourhoods and are starting to see benefits of bringing together our infrastructure and MX1 businesses into a single operational unit. In the period, we signed further renewals in our core neighbourhoods; grew our video platforms with new customers in Ethiopia, Brazil and Ivory Coast; expanded our managed services relationship with Discovery in Germany; and MX1’s Sports & Events team were instrumental in bringing the Women’s World Cup and Eurovision Song Contest to viewers across our neighbourhoods.”
“Looking ahead, our priority for H2 is to deliver on our financial outlook and the revenue expansion implied. We achieved this in H2 2018 and we are on track to do so this year. We’ve now secured 90 per cent of the expected revenue for 2019 and have good visibility of future revenue across Video and Networks,” he suggested.
“With respect to C-Band and our ongoing market-based engagement in support of the rapid deployment of 5G services in the US, through the C-Band Alliance, we have made further progress this quarter. The CBA has been extremely active with all stakeholders as focus and intensity around the repurposing of spectrum gathers momentum. I believe the record clearly shows that our proposal remains the only one that appropriately balances the support to the 120 million US TV and radio households with the need to quickly, efficiently and safely repurpose mid-band spectrum for 5G. I’m encouraged by the comments of the FCC Chairman who believes that there will be ‘results to show’ in the Fall,” concluded Collar.
Video underlying revenue of €603.8 million in H1 2019 was 8.8 per cent lower (year-on-year) at constant FX as a result of lower video distribution revenue (-8.7 per cent), including the North American wholesale business, and lower video services (-9.4 per cent) revenue which was mainly due to the non-renewal of low-margin ‘legacy’ services in MX1.
Networks’ underlying revenue grew by 5.0 per cent (year-on-year) at constant FX to €346.8 million in H1 2019. This expansion reflected the continued strong growth in the Government (+7.9 per cent) and Mobility (+10.9 per cent) businesses while Fixed Data was lower (-2.2 per cent) than H1 2018.
SES’s fully protected contract backlog at 30 June 2019 was €6.4 billion (gross backlog of €7.1 billion when including backlog subject to contractual break clauses). 90 per cent of the 2019 expected group revenue is now secured comprising over 90 per cent of the Video and over 85 per cent of the Networks expected revenue already contractually committed.