SES reported during its 9-months (Q3) results that HD channel growth on its fleet had taken the number of HD channels broadcasting on the fleet to “an industry leading” 3,150 channels which “reflected early signs of broadcasters considering completing their transition from SD to HD”.
The move to HD and with video pricing remaining healthy it helped reverse a trend of ever-lower Video division income. There was also a growing revenue stream from HD+ service in Germany.
Speaking at the post-results analyst call, CEO Steve Collar also highlighted the agreement to expand services to Dish Mexico and its 2 million subscribers, and helped secure more than €85 million in incremental backlog to the SES overall backlog. Collar added that there had been important renewals and new business secured YTD at the SES prime neighbourhoods with, for example, Globecast (for CGTN), Comcast and Sky. Video income was still down (4.6 per cent in the 9-month period, but for the same period last year the fall was 8 per cent).
He also talked about the 10 million dishes that have been repointed in Ethiopia and that there were excellent prospects for extra growth and revenues from the Ethiopian market.
Moreover, more than 95 per cent of 2021 group revenues were now contracted and in place.
Collar also stressed that the FCC’s C-band clearing incentive payments were on track, and represented an overall $4 billion (pre-tax) of revenue between Q1/2022 when the first $1 billion will be received, and 2023 when the balance is due from the FCC. “This is a big deal, and we are ahead of schedule for the second payment,” said Collar.
Collar said that SES was looking to further C-band opportunities [from other countries and US locations] now that the US position was clear. SES is working with the US C-band auction winners and there were opportunities for further monetisation.
He spoke about the post-Covid recovery in growth of its aero and cruise businesses (and a q-o-q current growth of 12 per cent).
Overall, SES has updated its revenue guidance for this trading year by about €40 million (to between €1.760 million – €1.80o million).
He promised “substantial benefits for SES shareholders” would flow from the $3 billion of FCC payments due later in 2023. “The further $3 billion (pre-tax) (and triggered end-2023) used in the most optimal way for the benefit of shareholders,” said SES in its presentation. The initial FCC payment of (pre-tax) $1 billion would be used to strengthen its balance sheet.
SES said it continued to “vigorously pursue claim of up to $1.8 billion against Intelsat”. The claim is made up of $450 million in compensatory damages and the balance in punitive damages”. Collar said there isn’t much to add at the moment, but continued to feel good about its position and the claim.