Eutelsat Q3: Negative growth dominates

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Eutelsat’s Q3 results showed negative growth in almost all its key divisions, but the company told analysts that its prospects were looking up.

Those losses, in hard cash, were miserable. For example, its worsening Broadcast/Video segment (62 per cent of revenues) fell by 8.5 per cent, while Data & Professional Video (13 per cent of revenues) fell 11.8 per cent. Government services (13 per cent of revenues) were down 8.2 per cent and Mobile Connectivity crashed 24.5 per cent. The only bright spot was Fixed Broadband (7 per cent of revenues) which grew 9 per cent. Add that lot up and it translated into revenues of €301.3 million (€322 million same period last year) and thus a fall of 6.4 per cent overall.

However, Eutelsat redeemed itself by telling analysts that it was upping its guidance for this full trading year to €1.2 billion-€1.22 billion (up €10 million at the lower end).  “Management are clear, however, that absolute revenue in 4Q21 should be similar to Q3, which would put the Full Year revenue on c.€750 million, and about 1 per cent ahead of consensus,” said Giles Thorne, equity analyst at investment bank Jefferies.

Thorne said there was little else of note to emerge. “There was nothing to advance the debate on the Nilesat [contract[ renewal; Eutelsat continues to work optimistically on further wholesale capacity agreements with European telcos for Konnect and Konnect VHTS; despite the promising contract win with Global Eagle Entertainment, the near-term outlook on Mobility is still uncertain; while the closure of Orby TV in the US will have a negligible effect on revenue.”

There were some operational and financial highlights. For example, Contracted backlog was up 6 per cent to €4.5 billion from €4.2 billion a year ago. The number of operational transponders at March 31st 2021 stood at 1,366, down by 11 units year-on-year and 14 quarter-on-quarter reflecting principally the end of life in stable orbit of the Eutelsat 48D satellite.

The number of utilised transponders stood at 950, down nine units year-on-year basis and by 17 units quarter-on-quarter reflecting principally the same effect as above. As a result, the fill rate stood at 69.5 per cent compared with 69.7 per cent a year ago and 70.1 per cent at end-December 2020.

At March 31st 2021, the total number of channels broadcast by Eutelsat satellites stood at 6,864 stable y-o-y and up 4 per cent q-o-q. The number of HD channels stood at 1,853 versus 1,667 a year earlier, up by 11 per cent and represented 27.0 per cent of channels compared with 24.3 per cent a year earlier.


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