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The first half of 2013 saw several major events for SES including the launch of the SES 6, which included expanded Ku-band payload will support DTH platforms and VSAT services.
Image credit: SES
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[Satellite TODAY 07-26-13] SES saw mixed results in the first half of the year, with increasing revenues, but declining profits. The decrease in profits can be partially explained by the analog to digital conversion in the German TV market, which not surprisingly impacted the company in the first half of this year. The prior year period included €42.6 million ($56.29) in revenue from four months of analog DTH transmissions in Germany, which ended April 30, 2012. This impacted the year-on-year comparisons for the first six months of 2013.
SES reported revenue of €910.5 million ($1.20 billion), an increase of 2.1 percent in the six months to the end of June. However, in this period, the company reported a €268 million ($354.16 million) net profit. This was €30 million ($39.64 million) down compared to the same stage last year. SES’s EBITDA decreased by 0.5 percent to €662 million ($874.82 million).
Despite the fall in net profits, Eric Beaudet, a satellite equity analyst at Natixis Securities called the results “a very good performance” in a research note issued today. Chris Quilty, senior vice president, Raymond James, agreed saying that the results “show solid underlying growth in most key markets.”
Major events for SES in the first half of 2013 included the signature of important customer contracts such as Oi and Orange Romania, the launch of SES 6 and of the first four satellites of O3b Networks’ constellation, and SES’ inaugural U.S. dollar bond issue.
As far as a global comparison to other operators, Quilty said "relative to Intelsat they [SES] reported much stronger growth in their North American business." But he also noted that "tough comparables remain in European business because of Germany’s analog shut off. Those effects will wane over time," Quilty said.
“The performance shows a strong acceleration (-1.8 percent in Q1), and was driven mainly by 18 percent increase in the service division. In the infrastructure division (+3.1 percent), growth was driven by emerging countries where the group has signed a series of contracts recently (Oi in Brazil, Cignal Digital in the Philippines, Sky Vision in Indonesia,” Beaudet, added.
SES plans to launch three satellites in the second half of 2013, indicating a continuing growth trend. The Astra 2E, a replacement satellite at the 28.2 degrees east orbital position carrying 12 incremental transponders, was due to launch in July. However, the failure of the preceding Proton launch led to reschedule the date to September 2013. The company also plans to launch the SES 8 satellite with 21 incremental transponders at the 95 degrees east orbital position. A SpaceX’s Falcon 9 rocket was scheduled to launch the SES 8 satellite in August but this has been postponed to October. Lastly, the Astra 5B, with 21 phased transponders for Central and Eastern Europe at the 31.5 degrees east orbital position, is now expected to be launched on an Ariane rocket in December.
All of these delays will have a negative impact on the company’s grow trend, according to Quilty. SES predicts the delays will have an impact on revenues and EBITDA of €18 million ($23.79 million). But the company is positive that, as cash outflows also move with launch dates, the project economics and returns associated with the projects will not be affected by changes in the timing of the launches. As satellite depreciation will also be later than foreseen for these programs, launch delays are not expected to reduce earnings per share in 2013 EBIT. EBITDA growth should also reflect an increased contribution from services activities in 2013.
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