Eutelsat’s OneWeb merger goes sour
January 30, 2024
Eutelsat was hammered on the Paris stock exchange in early trading on January 29th, instantly falling 15 per cent as the Bourse opened. Eutelsat had issued a trading update and the news, as far as OneWeb was concerned, was not good. Eutelsat had owned OneWeb for just four trading months which had enabled a “deep and granular” assessment.
Later in the day Airbus revealed that Eutelsat had exited the Airbus OneWeb Satellites joint venture factory in Florida. Airbus is now the sole owner of the facility. Financial terms were not revealed.
CEO Eve Berneke was as upbeat as possible during the trading update but nevertheless told analysts that OneWeb’s rollout was slower than earlier anticipated and not helped by the difficulty with some markets in obtain licences to operate. She said that while Saudi Arabia (“good discussions”) and India’s rollout was progressing well as far as permissions, others such as Thailand and Turkey were much slower and all-important landing rights for its signals had yet to be issued.
Berneke added that these delays meant that issuing reliable guidance on the deployment of the company’s operational ground-based Gateways was “very uncertain”.
She explained that OneWeb needed some 40 ground-based Gateways around the globe but fewer than 30 were in place.
The net result of these delays translates into a reduction in grows profit by 14 percent and will slash full-year revenue by some 7 per cent,
On the upside she said that OneWeb’s backlog “all contracted and firm” was already more than $1.1 billion and had grown by about $150 million in the pre-Christmas quarter and it continues to grow mostly on ‘take or pay’ terms. She said that customer usage was extremely positive and some existing clients were now added capacity to their original orders.
However, all this year’s financial guidance has been cancelled although there will be more detail on its half-year update on February 16th.
There should also be more information on probable CapEx obligations at the half-year announcements as to Eutelsat’s participation in the new European IRIS2 consortium of operators which will be building a major satellite constellation of LEO, MEO and Geostationary assets for military, governmental and commercial broadband.