Photo: SES

SES saw profits increase for 2021, but overall revenue fell to 1.78 billion euros ($2.02 billion), 2.9% down compared to 2020. SES achieved a net profit of 323 million euros ($365.8 million), up from 191 million euros ($213 million) in 2020.

The Networks division performance is now a key barometer when looking at the company’s results. For the full year, Networks achieved revenues of 735 million euros ($832.4 million), a 0.4% decrease compared to the same stage last year. Networks encompassed 41% of group revenue in 2021, in line with the percentage in 2020.

SES said that in the mobility segment of Networks, effects from the pandemic in commercial aviation and cruise were responsible for lower revenue compared to 2020. This was partly offset by a positive year-on-year performance in commercial shipping revenues. SES believes long-term fundamentals of mobility remain strong with recovery in cruise as ships return to service, and new business in commercial aviation.

In 2021, SES reached 1.046 billion euros ($1.18 billion) in revenues in Video, which represents a 4.6% decrease compared to the same stage last year. However, the 4.6% decrease represents a smaller decrease than occurred between 2019 and 2020. Video makes up 59% of group revenues.

As of 31 December 2021, SES delivered 8,386 total TV channels (up 1% year-on-year) to more than 355 million TV homes around the world. This includes over 3100 channels in HD which has grown by 6% compared to the same stage at the end of 2020.

Looking to 2022, SES projects group revenue between 1.75 million to 1.8 million euros, ($1.96 million to $2 million) with mid-single digit year-on-year decline in Video and low- to mid-single digit year-on-year growth in Networks. SES-17 and O3b mPOWER are expected to be important drivers of low- to mid-single digit average growth in group revenue from 2023 onwards.

“Customer engagement is growing well with almost a billion dollars of backlog now signed, including five of the top six major cruise lines, Microsoft, Marlink, and our landmark joint venture partnership with Reliance Jio. We also welcome the progress being made by the European Commission in the definition of a secure and sovereign multi orbit European space architecture which aligns well with both our infrastructure and our vision,” CEO Steve Collar said Thursday.

Ben Lyons, a satellite equity analyst at Credit Suisse said in a research note, “Revenues beat consensus estimates by +1.1% and EBITDA was in-line, partially driven by a FX tailwind (EUR/USD 1.15 vs consensus at 1.17) and a stronger performance in video.”

However, he said the one “disappointing” result was in Government where revenues declined 6% year-on-year (during the fourth quarter) driven by the continued impact from the Afghanistan withdrawal, which Lyons expects to annualize halfway through 2022. He added, “Guidance for FY 22 was a bit weaker than expected, with consensus revenues at the upper end when adjusted for FX and EBITDA above the high end of guidance. As we flagged previously, we continue to believe a degree of prudence is being taken around Networks which we think will come back gradually over time. Consensus expected 7% growth reported and the company guiding for low to mid-single digit growth.”

Roshan Ranjit, a satellite equity analyst at Deutsche Bank said in a research note, “The Networks business delivered an in line result versus Deutsche Bank estimates, but 1.5% below consensus. Fixed Data and Mobility delivering a strong performance. New 2022 guidance published this morning and when consensus is adjusted for FX, we calculate consensus revenues are just above the top end of revenue guidance range with consensus EBITDA c.4 percent ahead of the mid-point of the EBITDA guidance range given added spend to drive Networks growth.”

In a recent interview with Via Satellite, Collar said that SES will collect the first $1 billion for C-band clearing in the U.S., “a very significant milestone” that gives SES a strong balance sheet in 2022. He also previewed satellite launch milestones for 2022: “Our first three O3b mPOWER satellites will go up, likely in Q1, followed only a few weeks later by the second three and by the end of the year we will have our brand new, state-of-the-art constellation in service. O3b mPOWER is not only going to be transformational for SES but also for our industry.”