Flat revs in testing year for Eutelsat

| 29 July 2016

The effects of the commercial headwinds that Eutelsat has flagged for some time have been fully revealed in the satellite operator’s end of year results.

Eutelsat 26 June 2016For the year ended 30 June 2016, Eutelsat posted revenues of €1.529 billion, up 0.2% like-for-like on a yearly basis, and a group share of net income of €348 million, down 1.9% year-on-year.

The company has for the past few weeks been aiming to consolidate its finances in the face of what it calls slowing industry-wide momentum. At the end of June the satellite operator issued five-year senior unsecured bonds for a total of €500 million to raise long-term financing with a five-year maturity at attractive conditions. CEO Rodolphe Belmer said that action was required for the company as it has become clear in recent months that the traditional businesses within the fixed satellite services sector are facing a context of slowing industry-wide momentum and that the company is facing a lower growth environment.

The latest move was to begin divesting its stake in Spanish satellite company Hispasat, and Eutelsat stressed that its priority would be to maximise discretionary free-cash-flow generation through capex reduction, the containment of operating costs and balance sheet optimisation, while at the same time investing selectively to support a return to growth in 2018-19.

Commenting on the 2015-16 financial year, Belmer said: “The past year has seen a number of operational milestones ... We made further advances in our core video activity, exceeding the 6,000 channel mark on our fleet, with a further rise in HD penetration and the launch of the first commercial Ultra HD channels. At the same time, we are facing the challenge of a lower growth environment in certain of our core businesses, particularly data. In this context, we are implementing operational and financial measures aimed at restoring top-line stability as early as 2017-18 and maintaining our EBITDA margin above 75%.”