Eutelsat Revenues Drop to US$743.42 Million in 1H 2018-19, Reports Continued Profitability
Paris, France, Feb. 15, 2019 — Eutelsat Communications reported a drop in revenues to US$743.42 million (€658.1 million), down 4.4 %, in the first half of 2018-2019, compared to the same period last year, but the company maintained a high level of profitability with earnings before interest, tax, depreciation and amortization (EBITDA) of US$585.61 million (€518.4 million), or EBITDA margin at constant currency of 79%.
Eutelsat said it posted operating vertical revenues of US$746.02 million (€660.4 million), down 2.3% compared to the previous year, and reported Discretionary Free Cash Flow of US$265.47 million (€235 million). It also reported a backlog of US$5.2 billion (€4.6 billion).
Commenting on the first half results, Rodolphe Belmer, CEO of Eutelsat, said the company delivered a solid set of results. "While the revenues profile reflected the anticipated back-end loading in the second half, profitability remained robust and gearing was further reduced. We continued to leverage all components of cash generation, with the LEAP cost-savings plan on track, the effective application of design-to-cost to the HOTBIRD replacement, the successful US$903.72 million (€800 million) bond issue in October and the disposal of our stake in Eutelsat 25B. In addition, although it cannot be reliably measured at this stage, new provisions in the 2019 French Finance Law will likely have a significant beneficial impact on our corporate tax bill."
On the commercial front, Belmer said, the Konnect Africa Broadband service is being progressively launched in several countries, and its initial reception reinforces our confidence in the strong potential of this activity. "Elsewhere, we signed new or renewal contracts in most verticals including, in video, first deals for the recently launched CIRRUS platform as well as regular capacity contracts, and in Mobility, a multi-transponder deal for maritime connectivity. Several leads are in the pipeline for the remainder of the year."
Eutelsat said since the beginning of FY 2018-19, the company had taken further measures to maximise cash generation, leveraging all components of cash-flow with the successful issue of an US$903.72 million (€800 million) 2 percent Eurobond with a 7-year maturity, enabling the full redemption of the outstanding bonds bearing a 5 per cent coupon maturing in January 2019. This transaction will reduce pre-tax cash interest by some US$27.11 million (€24 million) on an annualized basis from FY 2019-20. It also cited the disposal of the interest in Eutelsat 25B for a cash consideration of US$152.5 million (€135 million).
Eutelsat said it continues to build the foundations for its return to growth by extracting greater value from its core Video business with the launch in September 2018 of Eutelsat CIRRUS, a hybrid satellite-OTT turnkey delivery solution enabling broadcast customers to offer a flexible, seamless content experience across multiple screens, and representing a further step in the integration of satellite into the IP ecosystem and capturing the connectivity opportunity with the commercial launch of the Konnect Africa broadband service in several countries and the completion of the overhaul of the distribution strategy in Europe focused on selected specialist distribution partners and major telecom operators.
Eutelsat said revenues of the five Operating Verticals (ie, excluding ‘Other Revenues’) were down by 2.4% on a like-for-like basis excluding a negative perimeter effect of the disposal of the stake in Eutelsat 25B and the acquisition of Noorsat.
Second Quarter revenues stood at US$364.88 million (€323 million), down 5.7% at constant accounting standards. Revenues of the five Operating Verticals stood at US$368.27 million (€326 million), down 3.0% year-on-year and by 2.2% quarter-on-quarter on a like-for-like basis.
The order backlog stood at US$5.2 billion (€4.6 billion) at 31 December 2018 versus US$5.31 billion (€4.7 billion) a year earlier, and US$5.2 billion (€4.6 billion) at end June 2018. The stability versus end-June reflects notably the inclusion of future revenues related to commitments from Orange and Thales on KONNECT VHTS as well as the new contracts in maritime and with the Ethiopian broadcasters in Video which offset the negative effects of the disposal of Eutelsat 25B, the adoption of IFRS 15 and natural backlog consumption.
The backlog,Eutelsat said, was equivalent to 3.3 times 2017-18 revenues. Video Applications represented 77% of the backlog.
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