SES sees modest video decline as it prepares for O3b mPOWER

Source: SES

Satellite operator SES posted revenue growth above its financial outlook for the full-year but saw its share price fall on missing Q4 profit expectations.

The company’s video business declined by 4.4% in 2023 to €967 million out of its total revenue pile of €2.03 billion, up 4.4% as reported and 0.8% adjusted for currency movements.

SES said that excluding €10 million of periodic revenue gained in Q1 2022, video was down 3.5% only, with mature markets contributing to the decline, offset by expansion in its sports and events business, with other international markets stable.

SES’s networks revenue was boosted by mobility, up 11.5%, boosted by expansion of services to cruise lines. Government revenue was up 6.1%, with overall networks revenue also up 6.1% to €1.062 billion.

Adjusted EBITDA of €1.025 billion, not including receipts from the C-band clearance in the US, was down 7.3%, or down 6.3% at constant currency, with an “unplanned” expense – a regulatory charge of around €15 million ­– in Q4 contributing to a downturn in profit.

O3b mPOWER ‘on track’

The company said its MEO satellite project, O3b mPOWER, is on track for a Q2 launch, with the first six satellites launched. However, a non-cash impairment of €2,123 million was recorded during Q4 2023 primarily impacting intangible assets and the initial O3b mPOWER satellites from the impact of lower life and capacity.

“It’s an exciting time to be joining SES and an honour to lead this established, world-class operator on the next phase of the journey. The 2023 results demonstrate the strong fundamentals of our business and attraction of our multi-orbit offering to a customer base of world-leading organisations, governments, and institutions. We delivered on all the financial objectives for 2023 including exceeding revenue expectations, secured €1.5 billion of new business and renewals across Networks and Video, and launched the first 6 O3b mPOWER satellites which will bring high-performance connectivity services to committed and prospective customers from early Q2 2024,” said CEO Adel Al-Saleh.

“With the hard work of C-band clearing in the U.S. behind us and cash proceeds received, we have strengthened our industry-leading investment grade balance sheet and unlocked important financial flexibility which creates the opportunity to expand our capabilities, enhance commercial offering, drive free cash flow, and deliver returns to our shareholders. While the competitive landscape in which we operate is evolving rapidly, SES is well positioned to succeed and grow as we continue to deliver differentiated and compelling solutions to our customers, underpinned by next-level execution and rigorous financial discipline.”