Eutelsat FY18/19: “Challenged operating environment”

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Paris-based Eutelsat says it is still suffering from a challenged operating environment which continues to weigh on the revenues of its core businesses.

At June 30th 2019, the total number of channels broadcast by Eutelsat satellites stood at 7,092, up 2.4 per cent year-on-year (+3.9 per cent excluding the disposal of EUTELSAT 25B). HD penetration continued to increase, standing at 1,551 channels versus 1,455 a year earlier (+6.6 per cent), implying a penetration rate of 21.9 per cent compared to 21.0 per cent a year earlier.

Nevertheless, CEO Rodolphe Belmer said that its Broadcast division was helped by a resilient market and the growth in the number of channels and growing penetration of High Definition channels. He said that “several” DTH bouquets had been added during the year.

Other highlights included the launch of Eutelsat 7C and the launch of its Cirrus satellite and OTT turnkey service as well as seeing its Konnect Africa service which was now up and running.

The company sold Eutelsat 25B for a benefit of €135 million as it was “non-core”.

Belmer also addressed ongoing Capex optimisation “with anticipated replacement of HOTBIRD constellation at significant cost reduction.”  He also announced a €100 million share buy-back programme spread over the next three years.

Overall revenues of €1.39 billion (down 5 per cent) with Video down 2.3 per cent; Government services up 2.3 per cent; Fixed data down 11.4 per cent; Fixed broadband down 4.6 per cent and Mobile connectivity up 7/9 per cent.

The number of operational transponders at June 30th 2019 stood at 1,387 down by 40 units year-on-year, principally reflecting the disposal of Eutelsat 25B and the end of life in stable orbit of Eutelsat 12 West B (satellites in inclined orbit are not included in the transponder count). The number of utilised transponders stood at 960, down 11 units year-on-year on a reported basis and down three units excluding the disposal of Eutelsat 25B, with the end of life in stable orbit of Eutelsat 12 W B being almost offset by the ramp-up of maritime business.

As a result, Eutelsat’s fill rate stood at 69.2 per cent compared to 68.1 per cent a year ago.

At June 30th 2019, the backlog stood at €4.4 billion, down 4.9 per cent compared to June 30th 2018. This reflected notably the negative impact of the disposal of Eutelsat 25B and the adoption of IFRS 15 as well as natural backlog consumption in the absence of material Video renewals, which more than offset the inclusion of future revenues related to commitments from Orange and Thales on KONNECT VHTS as well as the new maritime contracts.


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