Satellite group SES beats Q3 forecasts

Satellite firm SES beat quarterly forecasts on Thursday helped by its networks business, a stronger U.S. dollar, and recently acquired unit DRS GES.

One of the world’s biggest commercial satellite operators, the Luxembourg-based company posted third-quarter adjusted core earnings of 284 million euros ($279 million) on revenue of 501 million, compared with 286 million euros and 455 million euros, respectively, a year earlier.

Analysts on average had predicted adjusted EBITDA of 277 million euros and revenue of 494 million euros in a company-provided poll.

Foreign exchange gains in the nine months to September added 87 million euros to the group’s adjusted net profit which came in at 277 million euros.

The group said it expected the acquisition of GES, which it bought this year from Italian defence group Leonardo for $450 million, to contribute $85-90 million to its government solutions business between Aug. 1 and the end of December.

It said its first launch of the O3b mPOWER satellite communications system located in the medium earth orbit (MEO) would take place as planned in the fourth quarter and was scheduled for Dec. 15.

However, further launches have been pushed back to the first quarter next year, which Deutsche Bank analysts said “takes some shine away” from the good performance, as these are a key for SES to return to revenue growth.

SES shares were down more than 3% at 1129 GMT, underperforming the SBF index which was down 0.8%.

The group confirmed its full-year guidance of 1.75 billion to 1.81 billion euros in revenue and 1.03 billion to 1.07 billion euros in core profit, pointing to 2.7% growth in its networks business so far this year and important renewals secured in video.

Its networks business, which provides governments, telecom firms and cruise lines with satellite connectivity, saw a 2.7% rise in nine-month revenue.

Revenue from its core video business, which distributes TV channels such as Sky, Canal+, ARD and BBC, fell 5.6% since the start of the year, as satellite players see traditional video revenues decline and data becomes the dominant source of income.

“Our year-to-date performance reflects solid ongoing execution across the business and we remain fully on track to deliver on our 2022 outlook,” CEO Steve Collar said.​​ Reuters