SES Reports Revenue Uptick in H1, Along with Power ‘Trip Offs’ in mPOWER Power Modules

SES O3b mPOWER constellation. Photo: SES

Revenue at SES grew nearly 10% in the first half of this fiscal year, but the operator also disclosed a minor issue with O3b mPOWER satellites in its half year financial results on Thursday. Interim CEO Ruy Pinto led the company’s investor call for the first financial report since former CEO Steve Collar left the company in June.

During the operations campaign for the the first four O3b mPOWER satellites, SES observed sporadic “trip offs” on a fraction of the power modules on board, Pinto disclosed. He pointedly did not refer to it as an anomaly, and compared it to when a circuit breaker trips in a home. 

“These trip offs were recovered quickly and without impact on the performance of the mPOWER payloads. We will continue to investigate this phenomenon. In parallel, we are revising our operational procedures so that we can take these sporadic events into account,” Pinto said. 

“We are not overly concerned. But we want to make sure that we have no hiccups when we deploy these services,” he added. “We’re not really worried about any long-term or even short-term impacts of it.” 

O3b mPOWER is still expected to be in commercial service by the end of this year, and Pinto said upgraded ground infrastructure and a number of mPOWER-ready customer terminals have been deployed. 

The next batch of satellites, satellites five and six, are expected to launch in the third quarter of this year. The third batch, satellites seven and eight, are expected to launch in the second half of this year, and the final batch of three satellites in 2024. 

Backlog for the SES-17 satellite and O3b mPOWER system together now stands at more than $1 billion. 

SES total revenue was 987 million euros ($1080 million), up 9.8% year-over-year as reported. This includes the acquisition of Leonardo DRS, which SES completed in August 2022. SES announced a share buyback program of up to 150 million euros ($164 million), and confirmed its 2023 financial outlook of revenue between 1.95 billion euros to 2 billion euros ($2.1 billion to $2.2 billion). 

Networks posted revenue of 500 million euros ($547 million) in the first half of 2023, up 3% compared with the same time last year. Within the segment, Mobility was up nearly 14%. Pinto mentioned new cruise vessels with new installations as a driver, despite competition from Starlink.

“We shouldn’t pretend that we don’t have increased competition in the cruise market or in the mobility segment. We all know that Starlink is deploying at pace,” Pinto said. “The interesting aspect is that we still have a preferred relationship with our customers. Even when customers look at competitors such as Starlink, they come to us. That allows us to preserve the customer relationship and protect our position in that market.”

In the first half of 2023, Networks made up 51% of SES revenues, and Video made up 49%. Video posted revenue of 486 million euros ($532 million) in the first half, a 5% decline from the same time last year. 

SES successfully cleared the cleared C-band ahead of schedule and expects to receive the $3 billion (pre-tax) accelerated relocation payment in the fourth quarter of this year. 

SES is also pursuing $421 million of Intelsat’s C-band payment, which the operator argues is in line with the original C-Band Alliance agreement that the two companies would split proceeds evenly. A U.S. District judge recently sided with SES and sent the case back to bankruptcy court. 

Pinto said SES is “relatively bullish” that the case will end up in SES’s favor. “We have no control over the timing of an adjudication by the bankruptcy court judge. But we take heart from the fact that the appeals court indicated that the original judgment was not correct,” Pinto commented.