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Satellite firm SES’s first-quarter results beat expectations

SES, one of the world’s biggest commercial satellite operators, on Thursday reported first-quarter earnings above market expectations as it confirmed its schedule for two major projects and reiterated its full-year outlook.

The company confirmed that it expects the commercial launch of O3b mPOWER, a satellite communication system it is building to provide internet connectivity for customers such as Microsoft and Orange, in the third quarter of 2023.

SES expects to launch its fifth and sixth satellites for the project in June, having deployed two of its O3b mPOWER satellites in December 2022 and two more on April 28.

“This is the first time in seven quarters that SES has not announced a launch delay at its results,” Berenberg analyst Carl Murdock-Smith said.

The group said it is also still on track to receive $3 billion in pre-tax payments towards the end of the year for a project to clear C-band spectrum for 5G in the U.S.

SES shares were up 3.4% at 5.77 euros by 1030 GMT, outperforming the SBF120 index, which fell 0.72%.

The Luxembourg-based company’s first-quarter adjusted core earnings (EBITDA) of 265 million euros ($293.6 million) came in above the 255 million euros seen in a company-compiled consensus.

Demand for satellite launches is expected to accelerate after sanctions sidelined the Russian space launch industry. Giant satellite constellations could offer a new channel to beam broadband Internet from space.

In a call with analysts, SES’ CEO Steve Collar did not provide any update on the company’s discussions with Intelsat over a possible merger, but reiterated his view that “consolidation in the industry is broadly a good thing”.

Merger talks between the two signal further consolidation in the rapidly changing satellite Internet industry, in which Elon Musk-owned SpaceX’s Starlink and Amazon’s Project Kuiper are major players. Reuters

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