The Board of Directors of Eutelsat Communications, chaired by Dominique D’Hinnin, reviewed the financial results for the half-year ended 31 December 2017.
Commenting on the First Half, Rodolphe Belmer Chief Executive Officer of Eutelsat Communications, said: “First half results were in line with our expectations, with the decline in revenues mostly reflecting, as in the First Quarter, an unfavourable comparison basis in FY 2017. Profitability was robust, with the EBITDA margin gaining 0.5 points at constant currency to stand at 78.4%, reflecting stronger than expected delivery on the Leap cost savings plan; and we generated an 8% rise in discretionary free cash flow at constant currency, supported by highly effective capex containment. The first half also saw a solid commercial performance, notably in Video and Government services, as well as the entry into service of EUTELSAT 172B, both of which will support revenues in the Second Half. The integration of Noorsat, acquired to optimise Video distribution in the MENA region, is progressing smoothly. Looking ahead to the remainder of the year, all elements of our financial objectives are confirmed.”
Solid commercial performance to support revenues in the second half:
o Positive outcome of Video contract renewals, notably with Cyfrowy Polsat at the HOTBIRD position
o Capacity contract at the 5° West orbital position with SFR-Altice for the distribution of c. 20 HD channels
o Favourable outcome of US Government Autumn renewals with a rate of almost 95% in value (versus 85% in Spring 2017 and 90% in Autumn 2016).
o Incremental business secured in Government services at 174° East
Entry into service and ramp-up of EUTELSAT 172B with incremental capacity contracted for in-flight Mobility;
MoU with China Unicom to address satellite communications market in the framework of the “Belt and Road” initiative. In this context, China Unicom contracted the totality of the remaining HTS capacity on the EUTELSAT 172B satellite (60% sold to Panasonic);
Smooth integration of Noorsat, acquired in October 2017 to optimise Video distribution in the MENA region;
Improved profitability: o LEAP cost-savings program ahead of plan, helping 0.5 point rise in EBITDA margin at constant currency
Strong Discretionary Free Cash Flow generation, up 8% at constant currency o Effective capex containment in the first half
o Capex for current fiscal year now expected below the 3-year average objective