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Bank urges caution on SES numbers

August 5, 2020

Satellite operator SES will issue its Q2 and half-year numbers on August 7th and a note to clients from investment bank Exane/BNPP warns that the impact of Covid-19 is likely to impact the operator, especially its Mobility division.

The bank says that expectations of the operator’s Mobility revenues amongst observing banks is extremely wide, ranging from €25 million to €57 million. Exane’s forecast is for a 25 percent fall (y-o-y) at €37 million.

The bank uses Eutelsat’s recent numbers as a guide which fell 21 percent in its Mobility market despite market share gains in Eutelsat’s Maritime division.

“While we see Government flat and Fixed Data up 4 per cent on strong volume trends (as reported at Eutelsat), the pressure in Mobility is likely to result in SES Networks Q2 revenues to be down 6 per cent at €169 million (vs. consensus at €178 million),” says Exane/BNPP.

The report adds: “We [expect to] see SES Video to prove resilient with revenues of €273 million (consensus at €275 million). We expect group EBITDA of €244 million (including a €15 million restructuring provision) on 54.8 per cent EBITDA margins. Consensus stands at €254 million.”

SES’ share price has been extraordinarily volatile these past weeks, although it has to be said mostly moving downward and not up (€13 in February, and now barely €6 per share and in April at just €5.10).

The bank sums up the position saying: “For several years now, SES quarterly publications have been a source of share price volatility. This history coupled to the lack of visibility on the impact of Covid 19 on SES Networks leads us to be cautious ahead of numbers.”

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