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Bank: Concerns for Eutelsat over Russian exposure

June 12, 2022

A report from Berenberg on Eutelsat’s current position does not make the best reading. The investment bank says that Eutelsat’s share price has underperformed when compared to SES and unlikely to improve given new CEO Eva Berneke’s statement that Eutelsat’s planned return to growth in 2022-2023 was no longer achievable.

Blunt though the bank’s opinion is it is still able to maintain its ‘Hold’ rating advice to clients with a share price target slightly improved to €11.60 from the current €11.

Eutelsat’s next financial snapshot is due at its end-of-year position (on August 3rd) for its trading period to June 30th. But the bank’s view is that Eutelsat’s 6.3 per cent revenues from its Russian-related transponders (and contracted through Russian Satellite Communications Co, RSCC) are under threat.

Berenberg states that even though the Russian impact has been largely unaffected by the Ukraine war – and maintains neutrality as far as most clients – there have still been critics. The bank says: “These moral debates and operational risk further strengthen our pre-existing relative preference for SES which does not have material Russian exposure”.

The bank’s note anticipates a 4.6 per cent like-for-like decline overall with specific declines in broadcast, data and professional video, although strong growth in fixed broadband and mobile connectivity.

However, June 10th saw reports that Eutelsat will end its carriage of two key Russian channels, RTR Planeta and Rossiya 24, on June 25th. Eutelsat says it is reflecting the EU’s regulations which ban these channels

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