SES adds C-band windfall to outlook, sees broadcast revenues drop

Satellite operator SES has included guidance on its expected C-band relocation windfall in the US in its quarterly results for the first time, with proceeds from the US$3.97 billion in accelerated payments now included in its financial projections.

SES said that full execution of transition plan underway following unanimous election to accelerate clearing by satellite operators with total clearing costs of US$1.6 billion and more than US$1.5 billion expected to be reimbursed from mid-2021.

The first relocation proceeds, linked to success milestone in Q4 2021, will be used to strengthen the company’s balance sheet with final proceeds linked to success milestone in Q4 2023 to be used for a mix of return to shareholders, a strong balance sheet and what the company described as “any disciplined value-accretive investment”.

SES reported revenues of €947.5 million for the first half, down 2.4% of a like-for-like basis. Adjusted EBITDA was down 3.5% at constant currency, landing at €582 million.

Video underlying revenue was down 8% to €559.3 million, with distribution revenue down 7.4%. the company said the reduction in video revenue also reflected ‘right-sizing’ of capacity by customers in mature markets, and the decision to reduce exposure to low margin video services.

SES updated its outlook for the full year on anticipation of a slowdown in the pace of new business in the second half because of COVID-19-related challenges faced by its customers.

“The business has performed well in the first half of the year, delivering solid revenue in challenging trading conditions, while the benefits of the proactive cost-saving measures that we took early in the development of COVID-19 are also seen in our H1 results,” said CEO Steve Collar.

“We were particularly pleased to sign a broad distribution agreement with BBC Studios during the quarter, underlining our ability to support premium customers across a range of satellite and terrestrial distribution methods as well as significant extensions with ProSieben in Germany and Austria. On the Networks side, we are seeing a pickup in our Government business after a slower first half, with a new and innovative use of the O3b constellation for the U.S. Government among a number of important deals won and signed in the second quarter.”