Viasat of California, which already operates broadband-by-satellite services to businesses and consumers around the world, reported a 4.2 per cent drop in revenues (but Q3’s net income grew 4 per cent) but managed to boost its EBITDA by an impressive 17.5 per cent.
The company told shareholders and analysts that its massive new Viasat 3 Americas satellite – the first of three new type-3 versions – was about 95 per cent complete but the Covid problems is impacting production of the craft’s payload. Viasat is building the payload itself but Boeing has then to integrate the payload into the other elements of the satellite. Consequently, the planned launch of this first in a new series of satellites has slipped to Q1 next year.
“While work on the first two satellites has been affected by the recent intense wave of Covid-19 cases, we are nearing delivery of the first satellite payload to Boeing, a milestone that starts the final phase of the countdown to launch readiness,” stated Viasat.
The ‘Americas’ craft will be the first to launch, followed by a Europe/Mid-East version and then a satellite for the AsiaPac region.
Viasat’s management, now led by CEO Rick Baldridge, expressed optimism that “accelerating contributions from In Flight Communications and international markets” will contribute to growth in 2022 although deployment costs for Viasat 3 and start-up costs in international markets will offset those gains.
Mark Dankberg, now the company’s chairman, told analysts that by the time the Viasat-5 versions – today only in conceptual stages – come into use the V-5s could supply twice the capacity of Viasat-4.
There was also mention of future developments in follow-on versions of the Viasat fleet. The current Viasat-3 satellites are each capable of 5-7 Tb/s data throughput which is significant. But the ‘next-generation’ Viasat 4’s and 5’s could see that throughput grow dramatically. For example, the company said that Viasat-4 versions could double to 5-7 Tb/s, and that early concept work on Viasat-5 suggested double throughput again.
As to hard numbers, Viasat says it has a contracted backlog of $2.4 billion plus another $3 billion’s worth of potential contracts: “We are optimistic about IFC growth based on the global vaccine rollout, recent wins with Delta Air Lines and KLM, ongoing orders from existing customers, return-to-flight of the 737 MAX, and a very robust new business pipeline.” The Delta ‘win’ is seen as a potential negative for SES which currently has a service in place for Delta using SES 15.
On the subscriber front Viasat ended its Q3 with 596,000 subs, up from 583,000 a year ago but those recent numbers had slipped by 7000 from Q2.
Analysts at investment bank Jefferies summed up the position, saying: “What Viasat can do to manage its way through the pandemic revenue headwinds, it looks to be doing well.”