Analyst senses Intelsat optimism

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Despite the continuing challenges being faced by Intelsat, one analyst says he senses a “more optimistic tone” from the company.

Giles Thorne, an analyst at investment bank Jefferies, said that Intelsat is guiding overall revenues for this full year at $1.93-$1.98 billion which would represent a 5 per cent fall over 2019. The segment showing the most promise, he said, is ‘Network Services’ – which although saw quarterly revenues fell 1 per cent (y-o-y), the previous year saw the segment’s revenue crash 9.2 per cent.

“[This] is driven by take-up of managed service solutions, interest in I-39 in Asia and new service starts on Horizons-3e.” said Thorne. “We note a more optimistic tone to the guidance statement,” he added, noting the good news of a recent DTH contract win in India and Intelsat’s Government sector which should be stable.

However, Thorne took the view that the C-Band debacle was now looking a bit like a Hunger Games battle. “Intelsat’s 19-Feb [FCC filing] triggered SES to issue a stern rebuke today, expressing its disappointment in ‘Intelsat’s eleventh-hour attempt to renounce its commitments made to other CBA members […] in aid of a transparent and egregious attempt to capture a greater share of the proposed accelerated relocation payments’. SES has said it will ‘hold Intelsat responsible under its commitments’.”

“It appears that the Kennedy intervention has not only got an FCC Chairman to turn-coat, but now also has one-time colleagues turn on each other,” Thorne warned. “In the meantime, questions on the C-band was shutdown by management in the prepared comments pending publication of a final Order – some insights leaked through the gaps though: the capex guidance excludes any C-band related clearing costs; management focus is on attaining an optimal Order and not on the mechanics of the payments (so no comment on whether it would be above / below EBITDA nor where in the capital structure payments would land); there may / could be some folding in of Intelsat core business costs into C-band clearing costs (subject to FCC acquiescence).”


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