SES Q2: Networks up 7.1%
August 7, 2020
By Chris Forrester
Satellite operator SES has included the anticipated receipt of $3.97 billion into its forecast accounts and coming its way as a result of the FCC’s C-band restructuring order. The first batch of cash will come into the company from “mid-2021”.
SES confirmed it is buying four more O3b/mPower satellites, which will result in a 90 per cent increase in O3b’s throughput.
SES unveiled its Q2 numbers (to June 30th) which admitted the company was not immune to the impact of the Covid-19 virus and consequent lockdowns. “We anticipate a slowdown in the pace of new business in the second half of the year and have updated our financial outlook for the full year in view of the challenges faced by a number of our customers, particularly in Mobility and Sports & Events. We were quick and early to initiate exceptional one-off cost reduction measures of €40 – 60 million for 2020 to mitigate the impact of Covid-19 on our bottom line and are tracking well against this target,” said SES.
The company’s far-reaching ‘Simplify and Amplify’ cost-savings programme is now well underway and it has closed offices, reduced staffing and made other cost reductions that will result in €40 million-€50 million of savings from 2021 onwards.
SES also confirmed the retirement of Romain Bausch, once CEO and more recently chairman of the company, who stepped step down from the Board of Directors in July.
The high spot in terms of divisional performance was its ‘Networks’ segment (now 41 per cent of group revenue), up 7.1 per cent y-o-y and the third successive year of growth. ‘Mobility’, a sub-set of Networks, grew 22.6 per cent y-o-y.
However, Video, the backbone of the company because of its DTH contract, fell badly by 8 per cent “from ‘right-sizing’ of capacity by customers in mature markets, and the decision to reduce exposure to low margin video services activities contributing to lower Services revenue (-9.6 per cent),” said SES.
Fully protected contract backlog at June 30th 2020 was €5.9 billion (gross backlog of €6.4 billion when including backlog subject to contractual break clauses).
Steve Collar, CEO/SES, commented: “The business has performed well in the first half of the year, delivering solid revenue in challenging trading conditions, while the benefits of the proactive cost-saving measures that we took early in the development of Covid-19 are also seen in our H1 results. We were particularly pleased to sign a broad distribution agreement with BBC Studios during the quarter, underlining our ability to support premium customers across a range of satellite and terrestrial distribution methods as well as significant extensions with ProSieben in Germany and Austria. On the Networks side, we are seeing a pickup in our Government business after a slower first half, with a new and innovative use of the O3b constellation for the US Government among a number of important deals won and signed in the second quarter.”