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Eutelsat crashes on poor results

February 18, 2022

By Chris Forrester

Eutelsat had a bad day on February 17th in terms of its share price. Poor half-year results and the company pushing out to its 2023/2024 financial year any prospect of much improvement, drove its share price down from €11.39 to €10.70. There are also two satellite launches which are suffering damaging delays.

The Paris-based satellite operator now expects revenue to slip to €1.11-€1.13 billion ($1.26-$1.28 billion) for its five key business verticals in its fiscal year ending June 30th. Eutelsat had previously guided the market to expect revenues of up to €1.15 billion.

Part of the slippage in anticipated revenues was the non-availability of two giant – and financially important – satellites. Its Konnect VHTS and Eutelsat 10B satellites which have delayed launches. The two craft are being built by Thales Alenia Space. Konnect VHTS is now not expected to enter service until H2/2023. Eutelsat 10B will also be later to market (H1/2023). Eutelsat did not provide a launch date for Konnect VHTS other than it had slipped by some at least 3 months.

New CEO Eva Berneke, who took over from Rodolphe Belmer at the start of the year, said the group’s performance had been “satisfactory” and its free cash flow targets remained on track. She added that the group, which continued to suffer from an industry-wide decline in broadcast revenues, was also hit by the withdrawal of US troops from Afghanistan, which Eutelsat supplied with satellite communications.

There was a bit of news amongst the numbers. For example, Eutelsat’s ‘Quantum’ multi-beam craft had been in service since November 2021 with commercialisation on track. Four beams out 8 have been contracted (including 1 beam for Maritime, another for Government services).

Berneke told analysts that its investment in OneWeb had now wrapped with $580 million paid to date and a further $135 million to be paid in the future. Eutelsat owns a 23 per cent stake and is now the second-largest investor in the mega-constellation (after Bharti). She added that discussions with OneWeb on future cooperation were “progressing well”.

Eutelsat had already received $125 million from the FCC as the first portion of its incentive payment for clearing C-band frequencies. Berneke said Eutelsat expected to receive the second payment of $382 million this summer.

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