Advanced Television

SES confirms $3bn FCC cash received

October 31, 2023

By Chris Forrester

SES has received the $2.99 billion (€2.81bn) C-band compensation payment from the FCC. In its Q3 results, issued two days earlier than initially announced, it also stated that its next pair of O3b/mPOWER satellites will be launched in the next few days. Q3 highlights are:

  • Revenue (Year to Date) of €1.494 billion (+0.2 per cent YOY), including €507 million in Q3 2023 (+3.1 per cent YOY)
  • Video revenue of €727 million represented a reduction of 4.3 per cent, compared with YTD 2022. Video was 3.2 per cent lower year-on-year.
  • Networks +5.0 per cent YOY with Mobility, Government, and Fixed Data growth; Video -3.2 per cent YOY with €445 million of contracts signed
  • US C-band accelerated relocation payment ($3 billion pre-tax) fully received in October 2023
  • Extra C-band clearance revenues of $445 million still to come
  • Launch of O3b 5 and 6 to launch in early November
  • Existing O3b fleet to suffer shorter ‘in orbit’ lives. Two extra O3b craft to be built
  • Boeing to pay O3b compensation for faults
  • €150 million share buyback (announced August 3rd 2023) to start in November 2023
  • SES plans to exercise the call for €550 million hybrid (perpetual) bond in January 2024
  • Contract backlog at September 30th 2023 was €4.7 billion (€5.7 billion gross backlog including backlog with contractual break clauses). This included $830 million of fully protected contract backlog ($1.030 billion gross backlog) for SES-17 and O3b mPOWER combined.
  • Adel Al-Saleh appointed as CEO, effective February 2024

Ruy Pinto, the temporary CEO at SES, commented: “We are pleased with a solid year to date financial performance and remain fully on track to deliver on our 2023 financial outlook. We achieved year-on-year growth in all three of our main Networks segments and secured important Video renewals which underpin the long-term cash generation and value of our broadcast business. Solid EBITDA performance underscores our focus on managing controllable costs across the business.”

Pinto clarified the current position on the existing Orb/mPower fleet which had suffered power-based technical problems, commenting: “We have identified the causes of the power module issues with the initial 4 satellites in orbit and have now put in place a plan to address those issues. With this plan in place, we now expect the launch of the next two O3b mPOWER satellites in early November and can look forward to deploying customers and beginning commercial services from early Q2 2024.”

SES explained that it has been determined that the anticipated operational life and available capacity of the initial O3b mPOWER satellites will be significantly lower than previously expected. SES has secured firm commitments from Boeing and both companies are closely collaborating to deliver the full lifecycle capabilities of the constellation. SES and Boeing plan to upgrade five of the remaining satellites (7-11) already under manufacture and add two additional satellites into the constellation.

“The additional investment associated with this plan is expected to be fully covered within SES’s existing committed CapEx envelope, including supplier concessions,” stated SES.

Analyst Sami Kassab from investment bank BNP/Paribas said in a note to clients: “C-band cash receipt and Q3 are small positives. mPOWER launch date confirmation is a strong positive. The ability to add two satellites in the existing capex envelope is also a positive. Full disclosure of the financial impact of the mPower delay on FY24 is a clear negative.”

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