SES profits up 69%
February 24, 2022
By Chris Forrester
Satellite operator SES reported rising net profits up 69 per cent to €323 million (€191m in 2020), helped by lower operating costs and interest expenses. Shareholders will be pleased that the overall improvement in the operator’s prospects mean that this year’s dividend will rise to €0.50 (from €0.40), a 25 per cent rise.
SES said that about 85 per cent of its 2022 group revenues were already under contract and told the market that its 2022 outlook for overall revenues were €1.750- billion €1.810 billion). Moreover, SES has secured backlog for its SES-17 satellite and O3b mPower fleet to be more than €900 million. The two satellite projects will come into service in July 2022 for SES-17 and later in the year for O3b’s mPower.
Steve Collar, CEO of SES, commented: “2021 was a strong year for SES with revenue and Adjusted EBITDA in line with our objectives, over €1.2 billion of commercial renewals and new business wins secured, an increase in our Adjusted Net Profit reflecting our focus on all cost lines, and our net debt to EBITDA reaching a 6-year low.”
“Our Video business delivered an improved trajectory on the back of important renewals with our long-term broadcast partners, growing number of HD TV channels, and the expansion of the HD+ offering in Germany. Our Networks business performed well against the backdrop of an extended Covid environment, with a recovery in Mobility contributing to positive year-on-year growth in H2 2021, which we expect to accelerate over 2022.”
Collar added: “2021 was also a pivotal year for our C-band initiative in the US as we completed phase one clearing ahead of the FCC deadline and received $977 million (pre-tax) in accelerated relocation payments. Phase two is fully on track with a busy year of satellite launches in 2022, paving the way to triggering an additional incentive of $3 billion in late 2023.”
Contract backlog at December 31st 2021 was €5.2 billion (€5.8 billion gross backlog including backlog with contractual break clauses).
At December 31st 2021, SES delivers 8,386 total TV channels (up 1 per cent year-on-year) to more than 355 million TV homes around the world. This includes some 3,105 TV channels in High Definition which has grown by 6 per cent compared with 31 December 2020. Seventy-one per cent of total TV channels carried over the SES network are broadcast in MPEG-4, with an additional 5 per cent broadcast in HEVC.
As to its HD+ service, SES says: “The initial benefit of the increase in the cost to renew a 12-month subscription implemented in March 2021 and continued growth in the average number of paying subscribers led to year-on-year growth for HD+ in Germany. Looking forward, the full annualised contribution from the price increase and the introduction of new Internet Protocol-based solutions, such as HD+ ToGo (launched in October 2021) and HD+ IP (launched in February 2022), into the market are expected to support the future development of the business.”
Key metrics were:
- Video revenues: down -4.6 per cent (down -8.0 per cent in 2020)
- Networks revenues: €734 million (+0.5 per cent in 2020)
- Gov’t revenues: +3.8 per cent y-o-y