Inmarsat plc has reported a drop in its full year 2012 profit before income tax to US $293.6 million from US$366.9 million last year after revenues dried up from the ill-fated LightSquared plan to create a new mobile network in the US.
Profit to equity holders also decreased to US$217.1 million or $0.48 per share fromUS $249.3 million or US$0.54 per share last year. Adjusted profit per share was $0.60 compared to $0.53 prior year.
Inmarsat, a provider of global mobile satellite communications services, said total revenue, excluding LightSquared, would have been up 6% to US$1,278 million (2011: $1,205 million) and EBITDA US$643 million (2011: US$662 million) in 2012.
Inmarsat got stuck in a stalled project with Philip Falcone’s LightSquared Inc. to create a satellite-based, high-speed Internet network in the U.S. LightSquared filed for bankruptcy in May last year following a February decision by the Federal Communications Commission to block the service, citing interference with global-positioning devices used in navigating everything from fighter jets to minivans.
London-based Inmarsat had contributed U.S. airwave licenses to the project, which would have served as many as 260 million people.
Despite the company’s setback in LightSquared, Rupert Pearce, Inmarsat's Chief Executive Officer, said, the company was making progress across a range of activities that strengthen its core franchise, bring it closer to addressing new markets with its Global Xpress services.
“We are pleased with the improved results from our core MSS business and we are confident in reiterating all of our existing revenue growth targets. At the same time, significant technical and commercial progress with our Global Xpress programme means we expect to begin network deployment in 2013 as planned," Pearce said.
In 2012, Inmarsat added 7,980 FleetBroadband in its maritime service subscribers of which 1,547 were added in the fourth quarter. During the year, the company said, it saw encouraging take-up of its XpressLink service, the hybrid L- and Ku-band maritime service that will transition customers to Global Xpress.
While 2012 was the first year of availability, XpressLink has gained rapid market acceptance and has allowed Inmarsat to increase its share in the maritime VSAT market, the company reported. At the end of the year Inmarsat had an installed base of 1,186 ships using its VSAT services, including more than 330 ships using XpressLink.
In the land mobile sector, Inmarsat said the expected decline in data revenues is due to the combination of troop withdrawals from Afghanistan and the comparative impact of significant event revenue in 2011. Inmarsat estimate that Afghanistan and events in North Africa and Japan in 2011 contributed US$30 million more revenue year-over-year, compared with 2012, of which approximately US$4 million more revenue was in the fourth quarter 2011.
