Eutelsat Projects Return to Growth Next Year Despite Video Decline in 2022-23
Eutelsat’s headquarters in Paris. Photo: Eutelsat
Eutelsat Communications is optimistic for a return to top line growth in the coming fiscal year, despite drop in Video revenues. The company reported 1.13 billion euros ($1.25 billion) in revenue in its 2022-23 fiscal year on July 28, down 1.8% compared to the prior year.
Revenue in the Video segment fell 8% during the year to 705 million euros ($778 million). Eutelsat said this reflects a non-renewal with Turkish broadcaster Digitürk, and the effects of sanctions against Russian and Iranian channels. Video is still the largest portion of group revenues at 62%.
Government Services and Fixed Connectivity also saw declines in revenue.
Mobile Connectivity was a bright spot, growing 27% year-over-year to 110 million euros ($121 million), and Eutelsat noted particular momentum in the maritime area. Mobile Connectivity is now 10% of group revenues.
Contracted backlog fell from 4 billion euros ($4.4 billion) at the end of June 2022 to 3.4 billion euros ($3.8 billion) at the end of June 2023, but video now makes up a smaller portion of backlog at 59% compared to 64% last year.
Looking to the coming year, Mobile Connectivity and Fixed Connectivity verticals are expected to experience double-digit growth in fiscal year 2023-24 with Eutelsat 10B and Konnect VHTS entering into service, both with firm pre-commitments, and positive commercial traction.
Eutelsat said Video revenues are expected to be broadly in line with market trends of a mid-single digit decline, in the coming year, excluding the effect of sanctions.
Eutelsat said the transaction to combine with OneWeb will likely close in late September of this year, and OneWeb has a total backlog around $900 million euros ($993 million), a 50% increase since October 2022.
“Fiscal Year 2022-23 has been a very solid year for Eutelsat, with revenues at the top end of our range of expectations, a high level of profitability and robust free cash flow generation. From a commercial point of view we have seen strong momentum in our Connectivity verticals, confirming our strategy of shifting our business model to address these new applications,” CEO Eva Berneke commented.