Artistic render of Eutelsat Konnect VHTS, built by Thales Alenia Space. Photo: Thales Alenia Space

Eutelsat’s total revenue grew by nearly 6% in the first half of its 2024-25 fiscal year with growth in Connectivity, but the operator also took a 535 million euro ($560 million) goodwill impairment on its Geostationary Orbit (GEO) assets, expecting lower future cashflow from GEO.

Eutelsat reported its first half 2024-2025 fiscal year results on Feb. 14, for the six months to the end of Dec. 2024. The impairment charge was due to expectations of lower future cash flows from its existing GEO assets, with increased competition from Low-Earth Orbit (LEO).

“These [forecasts] take account of increased competition in the connectivity market and a greater than expected decline in demand for video services. This is consistent with the impact already experienced by the Group in lower Video customer renewal rates and more recently, the transfer of demand from GEO to LEO connectivity services,” the company said in its financial results.

CEO Eva Berneke told investors on Friday the company has seen headwinds with the Konnect VHTS satellite, which was targeted for for business-to-consumer (B2C) connectivity over Europe and Africa due to Starlink’s market share.

“We are looking at alternative solutions, especially within the Mobility segment for the Konnect VHTS satellite,” Berneke said. “Hopefully will be able to use it for other things than pure B2C connectivity. We do see, especially in the B2C segment, a move towards LEO.”

Despite this, Berneke confirmed to investors that first half performance was “in line with expectations,” and Eutelsat confirmed its 2024-2025 revenue and profitability objectives of flat performance in the operating verticals and slightly lower adjusted EBITDA margin year-over-year.

The first half results continue to show the transition to a more connectivity-based business rather than video revenues. In first half, Video constituted 52% of Eutelsat’s overall revenues, whereas Connectivity stands at 48%.

Overall revenues for the six months reached 606.2 million euros ($631.85 million), a 5.9% increase compared to the same stage last year.

Video revenues continue to decline. Video revenues of 309.2 million euros ($322.28 million) were down 6.6% compared to last year.

However, Connectivity revenues are on an upswing. Total Connectivity revenues for the six months reached 290.7 million euros ($303.01 million), an over 21% increase compared to the same stage last year.

Within the Connectivity segment, Government services increased nearly 30%; Mobile Connectivity increased 5.9%; and Fixed Connectivity increased 25.7%.

At the end of 2024, Eutelsat’s net debt stood at 2.7 billion euros ($2.81 billion). This was an increase of almost 152 million euros ($158.4 million) compared to the end of June. Eutelsat said this was mainly due to CapEx-related movements and higher financial costs, partially offset by net cash flow generated by activities.

“The past few months have seen the alignment of several factors paving the way for Eutelsat’s LEO build-out strategy: first, the exercise of the put option for the sale-and-lease-back of our passive ground infrastructure, with proceeds due H1 calendar 2026 and second, confirmation of the European Union’s IRIS multi-orbit constellation representing a key step in Eutelsat’s LEO strategy, which in turn defines the road map for the interim LEO constellation extension. We are actively working on a financing plan in line with our strategic road map and longer term leverage objective,” Berneke said in a statement.

In addition, Eutelsat announced changes to its board of directors, with four sitting directors — Mia Brunell, Esther Gaide, Cynthia Gordon, and Fleur Pellerin — resigning from the board. Board Chairman Dominique D’Hinnin also plans to retire. The board will start the process to recommend a new chair.

Former CEO of SoftBank Group International and Vodafone Europe, Michel Combes, has been appointed as an independent board member.