Intelsat’s Full-Year Results Come with Replacement Plans for IS-27
[Satellite TODAY 02-28-13] FSS operator Intelsat is already well into its plans to make up for the early February loss of the Intelsat 27 satellite (IS-27), which include shifting its satellite fleet to accommodate customer requirements and procuring a replacement spacecraft called Intelsat 27R (IS-27R).
Intelsat CEO David McGlade announced the plans as part of the operator’s 2012 full-year results. “While the failure of the launch of Intelsat 27 early this month was deeply disappointing, we are already reconfiguring our satellite fleet to accommodate customer requirements, including on our global broadband mobility infrastructure, a demonstration of the resilience and flexibility of our global satellite network,” said McGlade.
The Sea Launch Zenit-3SL rocket carrying IS-27 failed shortly after its Feb. 1 liftoff from a floating pad south of the Hawaiian Islands, resulting in the complete loss of the satellite. The launch failure ended Intelsat’s industry record of 39 consecutive successful launches, dating back to 1996. The satellite and launch were fully insured and Intelsat soon filed a claim of approximately $406 million with its insurers. The space insurance markets agree with McGlade’s assessment, projecting a loss of up to $400 million from the 1 February launch failure of the Russian-built rocket.
McGlade confirmed that a portion of the insurance proceeds would be used to fund the cost of building the IS-27R replacement satellite while excess proceeds would be used for general corporate purposes, which could include debt repayment. The customers that were signed up for IS-27 service will remain on the Intelsat 805 and Galaxy 11 satellites, which have an expected service life timeline that extends through the fourth quarter of 2017 and the third quarter of 2019, respectively.
“We plan to order a replacement satellite with a payload that addresses the specific needs of our media customers in the Americas,” McGlade said, referring to IS-27R. “We have also filed a partial loss claim with our insurers relating to the solar array anomaly on the Intelsat 19 satellite. We expect to receive approximately $82 million of insurance proceeds related to the partial loss claim in the first quarter of 2013.”
Intelsat’s next satellite launch is expected in the fourth quarter of 2014. The operator enters 2013 with $10.7 billion in contract backlog, which McGlade said provided more than adequate resources to meet expanding demand for broadband connectivity, global media distribution solutions and end-to-end government services.
“In 2012, we achieved steady revenue and Adjusted EBITDA performance while accomplishing a number of important milestones that improve our growth profile,” said McGlade. “We launched and placed into service five new satellites, with capacity that refreshed our premier video neighborhoods and established the first global broadband mobility infrastructure. We also announced our next generation satellite platform, Intelsat EpicNG, which is based on spot-beam, high-throughput technology that enables increased bandwidth quantity and efficiency to support future customer growth and access to expanded markets. We positioned Intelsat for further diversification of our government business when selected as a supplier under the Custom SatCom Solutions contract.”
Intelsat reported 2012 fourth-quarter revenue of $672.4 million and a net loss of $3.7 million. The company also reported EBITDA of $520.0 million and adjusted EBITDA of $516.5 million, or 77 percent of revenue, for the three months ending Dec. 31. Intelsat brought in approximately $2.61 billion revenue for the 2012 full fiscal year, with a net loss of $146.6 million during the same period.