SES sees stronger Q3 but expects hit from O3b mPOWER delay

Source: SES

A strong showing in Q3 has helped deliver a flat year-to-date revenue performance for satellite operator SES, but the company is likely to take a hit next year from delays to the deployment of its O3b mPOWER MEO fleet due to power module problems on existing satellites.

SES posted revenue of €1.494 billion foer the nine months to September, up 0.2%, with 3.1% growth in Q3 to €507 million helping push it into positive territory.

The company’s core video business declined by 3.2% for the first nine months, with €445 million of contracts signed.

Adjusted EBITDA declined by 4.5% for the nine months, to €792 million.

SES said that it now expects to launch its fifth and sixth O3b mPOWER satellites in November, with commercial service expected in Q2 next year. The company has been bediveled by delays to the project and has suffered from unexpected power module switch offs to existing satellites.

It said it would put mitigations in place to cover the problems. It plans to upgrade satellites 7-11 and add two further satellites within its existing committed capex envelope.

SES said the expected impact of the delay would be in the mid-single digit percentage lower range in terms of 2024 revenue and adjusted EBITDA before the potential mitigations, which include optimising use of its existing MEO and GEO combined fleet and additional programmes.

On the plus side SES this month tool receipt of its C-band relocation payment of US$3 billion.

“We are pleased with a solid year to date financial performance and remain fully on track to deliver on our 2023 financial outlook. We achieved year-on-year growth in all 3 of our main Networks segments and secured important Video renewals which underpin the long-term cash generation and value of our broadcast business. Solid EBITDA performance underscores our focus on managing controllable costs across the business,” said CEO Ruy Pinto.

“I am delighted to confirm that we have now collected the full $3 billion (pre-tax) in accelerated relocation payments from Phase II U.S. C-band clearing. With the clearing completed ahead of schedule, we have fully delivered on the objectives of enabling accelerated deployment of 5G services in the U.S., protecting the critical broadcast services delivered by our customers, and realising significant value creation for SES.

“We have identified the causes of the power module issues with the initial 4 satellites in orbit and have now put in place a plan to address those issues. With this plan in place, we now expect the launch of the next two O3b mPOWER satellites in early November and can look forward to deploying customers and beginning commercial services from early Q2 2024.”