Intelsat Reports $912M Net Loss in 2020, Withdraws From OneWeb Lawsuit
The impact of COVID-19 on Intelsat‘s business became much clearer in the operator’s 2020 end-of-year financial results, in which it reported $912 million in full year losses and a drop in full year revenue from $2.06 billion in 2019 to $1.913 billion this year. The operator is still in the process of a Chapter 11 bankruptcy reorganization.
All of Intelsat’s business divisions experienced a year-over-year decline in fourth quarter revenue. Intelsat Network Services Q4 revenue dropped 9% to $181.7 million. Its Q4 Media revenues, which account for a little more than 40% of its total revenue, fell 5% to $200.6 million compared to the same period in 2019. Intelsat’s Government business revenue also declined 3% in the fourth quarter to $92.7 million.
Intelsat management attributed the decline in revenue to non-renewals of contracts and the cancellation of sporting events due to the COVID-19 pandemic. Though, the operator’s average fill rate stayed relatively level at 73%, compared to 75% this time last year. Its backlog stood at $6.1 billion at the end of Q4 compared to $6.2 billion in Q4 in 2019.
While Intelsat was able to cut its full-year net expenses from $1.2 billion in 2019 to $813 million this year, it also paid an additional $50.8 million in bankruptcy costs in the fourth quarter.
“The COVID-19 pandemic made 2020 a challenging year,” said Intelsat CEO Stephen Spengler. “Our mobility customers were significantly impacted by the reduction in travel in both the maritime and aeronautical sectors, yet they renewed contracts and committed to new business with Intelsat. In addition to ongoing business trends, the media services business was also affected by weakening market currencies and a reduction in occasional use revenue, attributable in large part to COVID-19. Satellite network services and the uptake of our FlexGround land mobility managed service drove positive momentum for the government services business.”
Spengler said that the operator will spend the next year prioritizing its commitment to the FCC to relocate its C-band customers and free up spectrum for 5G. Intelsat must hit established deadlines in order to secure billions of dollars in accelerated payments promised by the FCC for the spectrum reallocation.
Separately, the operator also reported in a March 29 filing with a New York State Court that it consensually settled its legal battle with OneWeb, which itself just emerged from Chapter 11 bankruptcy. Intelsat sued OneWeb and Softbank Group in September 2019, accusing the organizations of fraud, conspiracy, and breaching contract.
Both operators said that they will withdraw their claims, pay their own legal costs, and work together, “in good faith to obtain the dismissal of the New York State Court Litigation as soon as reasonably practicable after (a) this stipulation is so-ordered by the Intelsat court and OneWeb court, (b) the Intelsat claims are withdrawn in the OneWeb cases and (c) the OneWeb claim is withdrawn in the Intelsat cases.”