Just about every single player in Quilty Analytics ‘Satellite and Space’ sectors is suffering depressed share prices – largely as a result of the Covid-19 pandemic – and in many cases dramatically so.
There has already been fall-out with OneWeb and Speedcast entering Chapter 11 bankruptcy protection. Other hard-hit players, such as the In-Flight Communications names such as Global Eagle Entertainment and Gogo are having a very hard time of it with next-to-zero flying and the cruise sector in mothballs.
Other major satellite names such as SES and Eutelsat have slashed dividend payments and issued warnings that it will take some time before they return to health. Intelsat is a debt-burdened basket case as it decides whether to embrace a major financial restructuring. Sky Perfect JSAT, for example, has entered the ‘new normal’ of slipping reporting dates.
Quilty, in its Q1 analysis, pulls no punches saying that a “Shakeout of certain weaker (or unlucky) players will occur, particularly amongst earlier stage companies”.
Quilty tells its readers that in a word, today’s Satcom sector is “tumultuous”. It reminds readers that it wasn’t so long ago that the most important topic was the potential sale of C-band spectrum over the US. Early in the quarter, C-band developments were the primary driver of Intelsat and SES performance. From a satcom industry-wide point of view, LEO Broadband developments were also a key focus.
Now, says Quilty, it is bankruptcy – and overcoming the risks of bankruptcy – that is the main focus for many players. “Almost-unimaginable impact to in-flight and cruise-focused service providers,” states Quilty. “Gogo expects April revenue to be down 60-70 per cent YoY.”
“We expect ongoing rapid change to occur over the next 3-6 months, particularly within the service provider / downstream landscape,” adds Quilty.