SES’ Mobility Headwinds Continue Through First Half of 2021
SES delivered 875 million euros ($1 billion) of revenue in the first half of 2021, as a decline in Video revenues slowed down, and Networks performance stayed flat. Revenue in the first half was down 3.3% compared to the first half of 2020 at constant FX.
Adjusted net profit improved by 34.5% year-on-year to 152 million euros ($180 million), due to lower operating expenses, lower depreciation and amortisation expenses, and a reduction in net interest expense.
Revenue from Video — which makes up most of SES’s group revenue, at 60% — is in decline, but the decline in the first half of 2021 was slower than last year. Video underlying revenue of 526 million euros ($623 million) was down 3.9% year-on-year at constant FX, compared with 8% year-on-year decline in FY 2020
SES said lower revenue from mature markets was partially offset by higher revenues from international markets, growth in HD+ subscribers in Germany, and a recovery in sports and events.
For the second quarter, underlying revenue of 263 million euros ($311 million) was 3.2% lower year-on-year at constant FX and flat compared with Q1 2021.
Video as a percentage of group revenue is mostly flat compared to this time last year at 60%. In H1 2020 it was 59% of group revenue.
SES CEO commented on the Video segment performance: “The lasting value of our Video business is reflected in the improved trajectory, the important long-term renewals at our core neighborhoods, increased penetration of HD TV channels, and new paying subscribers for HD+ in Germany. Excitingly, in H2 2021, we will be expanding and enhancing our HD+ portfolio with the extension onto mobile devices and IP-enabled non-satellite homes.”
Networks made up 40% of group revenue in H1, compared to 41% in the same time last year. Networks underlying revenue of 349 million euros ($413 million) was flat compared with H1 2020.
The first half of the year saw ongoing growth in Networks’ Government segment, with a 11.3% boost compared to last year. SES said strong contribution from new Medium-Earth Orbit (MEO) and Geostationary (GEO) network solutions for the U.S. government led to overall strong year-on-year growth in revenue compared with H1 2020.
The COVID-19 pandemic continues to affect commercial aviation and cruise customers, and revenue for this portion of Networks declined 10.7% compared to last year. Commercial shipping, however, had positive year-on-year performance. SES expects the impact of COVID to continue to affect Mobility revenues in the short term.
Fixed Data was also down about 4% compared to last year. SES said lower year-on-year revenue in the Pacific region has not yet balanced out growth with tier one mobile network operators in the Americas. Revenue ramp up in the global cloud segment is expected in the second half of the year.
For the second quarter, Networks underlying revenue of 176 million euros ($208 million) was consistent with the prior period and 1.1% higher than Q1 2021.
“Networks continues to perform well notwithstanding the COVID-impacted environment, notably in Government, reflecting the strong demand for our unique multi-orbit resilient solutions,” Collar said. “With O3b mPOWER still over a year away from commercial launch, we have secured over $300 million in backlog from major cruise brands which underscores the compelling combination of high throughput and high flexibility of the constellation.”