[Satellite News 11-11-11] SES generated a 3 percent year-to-date recurring revenue increase at 1.283 billion euros ($1.74 billion) and a 34.3 percent increase in profits to 446.7 million euros ($609.2 million) in the 2011 third quarter. The satellite operator turned in a solid third quarter despite pestering delays caused by the failed Russian Proton launch of Express-AM4 in August, which siphoned SES revenues, according to the company’s latest financial results issued Nov. 11.
The Russian launch failure pushed the QuetzSat-1 mission back by two months and the SES-4 launch back into late December. The operator said SES-5 would now launch in the second quarter of 2012 and that the delays, “will reduce our revenue growth in the fourth quarter, while the satellite program economics remain unaffected by the launch delays and will continue to support our primary strategic objective of long term value creation,” SES said in a company statement.
For the full year, SES is in line to achieve revenue and EBITDA growth guidance of approximately 3 percent, apart from a revenue shortfall of 10 million euros ($13.6 million) directly resulting from the launch delays.
SES President and CEO Romain Bausch said he was pleased with the company’s activity in the third quarter, as well as its resiliency in the face of uncontrollable circumstances. “In the third quarter, SES successfully launched four new satellites, an industry record,” Bausch said in a statement. “SES also made progress in developing its Central and Eastern Eurosopean business, concluding an important strategic partnership with Russian operator Gazprom Space Services (using Astra 1F satellite capacity), and signing a new DTH platform, Magticom, for Georgia.”
Several factors weighed in on the operator’s increased profits during the quarter. SES increased its operating profits by 3.1 percent to 609.9 million euros ($832.5 million) due to the fact that the operator’s year-to-date net financing charges of 105 million euros ($143.3 million) were substantially lower than the prior year period as a consequence of lower net interest costs and favorable net foreign exchange rates. SES’ income 41.3 million euro ($56.3 million) tax expense benefited from investment tax credits on its Astra satellite replacement program.
The operator said its revenues were principally driven by new contracts, as well as by the first contribution yielded from its strategic partnership with Gazprom Space Services. New contracts signed in SES’ first-half fiscal year represented renewal and new business totaling approximately 1.6 billion euros ($2.18 billion), enabling SES to increase its contract backlog to 7.1 billion euros ($9.6 billion) at the end of September – an increase of 9 percent from the end of 2010.
The group’s total transponder utilization rate increased from 78.7 percent in the same period in 2010 to 81 percent at the end of September 2011. The operator said its HD Plus service in Germany delivered a robust contribution. “The number of free-to-air HD program broadcast on the HD Plus platform has increased to 12. More than 1.5 million households now receive HD Plus. While the majority of these households are still in the introductory 12 month free trial phase, the number of paying customers stood at about 250,000 at the end of the quarter, with a conversion rate into paying customers of well over 50 percent,” SES said in its results.
SES also has had a busy year in launching replacement satellite and new capacity, with four SES satellites and YahSat-1A having been launched to date. YahLive, a company co-owned by YahSat and SES, maintains 23 Ku-band transponders. “The ambitious SES investment program will continue with its strong focus on growing geographic market segments,” SES said. “Eight satellites, including SES-4 and SES-5, are scheduled to be launched by the end of 2014, providing both replacement and incremental capacity.”
