Eutelsat continues to reduce debts in ‘solid year’

Satellite operator Eutelsat has seen its revenues drop by 3.5% for the end of its 2020-21 financial year, but the company is positive after a ‘solid year’.

Following a pandemic year which has hit the entire industry, the operator saw its total revenues dip from €1.28 billion to €1.23 billion, while EBITDA was also down by 6.4% to €921.9 million.

Operating income meanwhile was down by 29.2% from €490.2 million to €347.2 million.

Despite the figures being negative on paper, analyst Jefferies noted that it was a “Solid end to the year.”

The analyst noted: “With revenue landing towards the top end of the range. The FY22 revenue guide will bring numbers down for this year but FY23 onwards looks well underpinned if management convinces on the growth narrative. Conversely, the FY22 dFCF upgrade (now 10% ahead of cons.) is a welcome counterpoint. As is the 5% growth in the dividend.”

Eutelsat CEO Rodolphe Belmer echoed these positive sentiments, and said: “FY 2020-21 was a solid year with revenues at the high end of our upwardly revised guidance, record high cash generation and a further reduction in our Net Debt / EBITDA ratio. Major commercial highlights included, in Broadcast, the Sky Italia renewal, reflecting the long-term relevance of satellite in Europe and two hosted payloads in Government Services. The year was a turning point for our Connectivity business, in particular Fixed Broadband, with notably the entry into service of EUTELSAT KONNECT as well as major wholesale agreements with Telcos, Orange and TIM, for capacity on both EUTELSAT KONNECT and EUTELSAT KONNECT VHTS. 

“Finally, Eutelsat accomplished a major strategic move, gaining a foothold in the LEO segment through its investment in OneWeb. OneWeb represents an additional growth engine for our Connectivity businesses with strong potential for co-operation thanks to complementarity of resources and assets.”

The CEO added that Operating Verticals revenues for FY 2021-22 are expected between €1.11 billion and €1.15 billion. The company predicts a return to growth from FY 2022-23 with an acceleration in FY 2023-24.