Intelsat suffering in “challenging” environment

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Intelsat’s Q2 results, to June 30th, were not impressive. The company is in Chapter 11 bankruptcy reconstruction as a ‘debtor in possession’ and it is near-certain that it will exit bankruptcy in a stronger position, but at the moment the negative news is extensive.

For example:

  • Network Services (worth 37 per cent of Intelsat’s total revenues) fell 5 per cent to $176.7 million.
  • Media (42 per cent) fell a worrying 9 per cent to $202.6 million.
  • Government (20 per cent) rose a useful 3 per cent to $96.1 million.

The changes contributed to a total of $482 million in revenue (down 5 per cent) but a net loss of $405.4 million for the quarter. However, the loss was ‘better’ than that incurred a year ago which was $529.7 million (Q2/2019).

It spent $298.7 million on reorganisation connected with its Chapter 11 position.

Intelsat’s CEO, Stephen Spengler, said, “Our business demonstrated resiliency in a challenging operating environment, highlighted by a sequential quarterly increase in revenue and Adjusted EBITDA largely from the successful execution of a new agreement with Speedcast in our network services business. Financial results, when compared to the same period last year, reflect the ongoing challenges in our network services business due to the impacts of COVID-19 on cruise in maritime and aeronautical in mobility, despite our booking new business in merchant maritime and enterprise network applications. The decline in the media business was driven by ongoing secular headwinds that we have experienced over several quarters. Finally, the government services business delivered year-over-year growth in revenues resulting from strong uptake of third-party services and growth in our new FlexGround managed services.”

Spengler said that Intelsat would be delivering further comments to the FCC next week (on August 14th) as to its C-band transition plan.

Intelsat’s fill rate was 75.1 per cent (down on the previous quarter’s 78.5 per cent) and contracted backlog was down $200 million to $6.4 billion.


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