Intelsat ‘Recession Resistant’ With Strong 2007 Numbers

[Satellite News – 3-21-08] Intelsat Ltd. reported record revenues in 2007, and CEO Dave McGlade said the results indicate that the satellite operator is “recession resistant.”
    Intelsat reported revenue of $575.5 million in the fourth quarter, up 6 percent over the same period in 2006, and a net loss of $2.6 million, down 96 percent from a loss of $63.4 million a year ago. For the year, Intelsat posted revenue of $2.2 billion, a 29 percent increase over 2006’s revenues of $1.7 billion. Intelsat’s net loss declined 48 percent, from $368.7 million in 2006 to $191.9 for 2007.
    McGlade downplayed the losses, pointing to a backlog amounting to $8.2 billion. “In 2007, Intelsat demonstrated the ability to deliver revenue growth, improved operating profit margins and positive free cash flow from operations even as we made significant investments in our fleet,” he said during a March 20 conference call. “Our fourth quarter results provided a strong finish to a good year, with revenue growth in excess of 7 percent over the prior year quarter after excluding our legacy channel service offering.”
    Intelsat has not been affected by the economic slowdown in the United States, both because the company operates worldwide and because it is essential to the operations of most of its customers.    
    “We feel that because of the nature of our business being so important to customers that we are recession resistant,” McGlade said. “This is a tough time for many other companies, and we do feel that because of diversification from a product standpoint, a customer standpoint and a regional standpoint, we’re recession resistant and offer an attractive investment scenario for [investors]. Because we offer such important services for many of the countries where we serve our customers, we’re the first company to get paid. If you look at some central African countries we provide their communications exclusively in and out of their countries.”
    Intelsat’s acquisition by Serafina Holdings, an entity formed by funds advised by BC Partners, Silver Lake and other equity investors, was completed in February. Intelsat emerged from the acquisition with $15 billion in debt.