SES posts solid first half with buyback announcement and O3b mPOWER update

Satellite operator SES’s networks segment revenue overtook its video revenue in the first half of this year, with video declining by 3.5%, or by 5.2% including periodic revenue to €486 million, and networks rising by 3.1% to €501 million.

The networks segment was driven by strong mobility growth of 13.8% to €139 million.

Total first half revenues were down 1.2% to €987 million. EBITDA dropped from €529 million to €499 million.

SES said it would begin commercial service of its long-awaited O3b mPOWER MEO-based broadband satellite constellation by the end of this year.

The programme has seen the launch of four satellites so far, with the delayed fifth and sixth satellites now scheduled for Q3 and the seventh and eighth for the second half. The final three satellites are scheduled for launch next year.

SES also announced a share buyback programme, and new CEO Ruth Pinto said that the company had also cleared the US C-band ahead of schedule and expected to receive US$3 billion pretax payment for relocation in Q4.

Pinto, who replaced Steve Collar on an interim basis earlier this year, also confirmed the group’s 2023 financial outlook.

The financial outlook confirmation and buyback programme met two of the criteria set out by analysts at Berenberg last month for a likely positive response from investors.

Berenberg said that reiteration of guidance and the announcement of a buyback programme would go some way to convince investors that the company was a good bet.

The third area of focus identified by the analysts was the expected length of time of the delay in O3b mPOWER launching commercial services. The fifth and sixth satellites were previously expected to launch in Q2, with commercial service to begin in Q3.

With a buyback programme launched, outlook confirmed and some reassurance about the timing of the O3b launch given, SES’s management were able to demonstrate, in Pinto’s words, “our conviction in SES’s long-term fundamentals”.