Satellite operator Eutelsat turned in disappointing first quarter results, with total revenues slipping by 2.7% year-on-year to €335.1 million, and was forced to cut its full-year revenue target after failing to secure a US government contract renewal.
The core video business, which accounts for two thirds of the operator’s revenues, was down 1.7% to €217.2 million. The fixed data business was also down, by 12.1% to €33.3 million, while government services was up 4.2% at €42.4 million.
Eutelsat said that excluding the impact of a lower contribution from French free-to-view platform Fransat, broadcast revenues were stable.
The number of channels of the platform stood at 6,999, up 3.6% year-on-year, with the number of HD channels standing at 1.419, up 17% despite a dip in the first quarter.
Eutelsat highlighted its recent contract with Orange Slovensko, Orange’s Slovakian unit, as evidence that contracts with telecom operators to use satellite to extend the reach of their IPTV services had potential for growth.
Speaking to analysts after the results were published, CEO Rodolphe Belmer said that “the vast majority” of the company’s broadcast business was stable. He said that Eutelsat had a different geographic exposure and a greater emphasis on DTH contracts than other players in the market.
Belmer said that the company’s video business would stabilise and grow slightly, despite some headwinds, including the decline of Fransat.
He said that Eutelsat had “some contracts of the same kind” as its deal with Orange Slovensko in the pipeline that it expected to close in the coming weeks. He said the 28° West orbital slot serving the UK market was “doing very well” and that growth could be expected for the 7-8° West orbital slot serving the Middle East and Africa.