Satellite downgrades: “Far too emotive”
A report Aug 5 from investment bank Jefferies suggests that the recent dramatic falls in share price values at Eutelsat, SES and Inmarsat, had been extrapolated too far (from Eutelsat’s May profits warning) and too deep.
The bank’s equity analyst Giles Thorne says: “While we totally accept the over-supply in legacy widebeam capacity in certain regions and applications (trunking, enterprise VSAT and cellular backhaul) there is an under-supply of cheap-enough capacity in other applications (residential broadband, cabin connectivity, maritime). The message from us remains that investors should back those equities with the minimum risk of cannibalisation (what we’ve previously called the ‘bumps along the road’) and the most credible route to participating in the HTS driven growth. And on that basis we’ve recommended (and continue to recommend) Inmarsat and SES, and to a lesser extent Eutelsat.”
Thorne admits that there remains some deep-seated scepticism as to the operator’s abilities to navigate through the coming years.
SES numbers – HDTV at 33%, 16 Ultra-HD channels
“Glimmers of hope” but caution, says market
SES revealed their 1H numbers on July 29, and the Luxembourg-based satellite operator said its fleet now carried 16 commercial Ultra-HD channels, and that its portfolio of 2442 HDTV channels represented 32.7% of the total 7164 channel count (and HDTV growth is up 12.1% y-o-y). The growth in commercial UHD channels is dramatic. This time last year there were none. That growth is guaranteed to continue with Sky’s commitment and other expectations from the pay-TV and commercial sectors.
There’s other good news, with fresh contracts in the aeronautical sector (with Gogo, Panasonic and Global Eagle), and new DTH platforms helping boost its Video segment (which now represents 70% of revenues, compared with 66% at this time last year).
CEO Karim Michel Sabbagh said that the SES consolidation of O3b’s revenues which started on August 1. This full year O3b’s revenues are expected to double to more than $100m. Sabbagh confirmed that 1H numbers overall were down 4.2% (at €957m) which impacted EBITDA which also fell back 5.4% (to €700m) and an EBITDA margin down from 73.5% to 73.1%. Its all-important contracted backlog fell back €100m to €7.3bn.