Eutelsat delivers ‘robust’ results as broadcast business holds up

Satellite operator Eutelsat has turned in what CEO Rodolphe Belmer described as a “robust” set of full-year results that saw broadcast revenues fall by only 1.2% on a like-for-like basis year-on-year, while overall revenue dropped by 5%.

Eutelsat posted total revenue of €1.278 billion for the year, with broadcast revenues accounting for €785 million, the largest and best-performing of its main industry verticals.

Eutelsat said the decline in broadcast sales was down to lower revenues from its 36° East position after Russian customers returned a couple of transponders and the termination of a contract for sub-Saharan Africa at the 7° East orbital slot.

The total number of channels broadcast by Eutelsat satellites stood at 6,788, down 4.3% year-on-year at the end of June.

HD penetration continued to increase, standing at 1,679 channels versus 1,551 a year earlier, implying a penetration rate of 24.7% compared to 21.9% a year earlier.

Eutelsat saw strong growth in Sub-Saharan Africa with the addition of new platforms Ghana RCS, Africa XP and Strong Roots as well as the signature of a deal with Canal+ in Ethiopia at 7° East..

A contract with the Greek operator, Forthnet, has been renegotiated on lower terms following the change of control of the company to Serbia’s United Group.

Analysts at Berenberg concurred that the company’s broadcast business remains “robust”, with core broadcast revenue sof €192-€198 million being reported for the past 12 quarters in a row.

“This resilience is unique within the satellite broadcast sector and is a result of Eutelsat’s superior application and geographic exposure versus peers,” the analysts said.

Broadcast revenues have fed into free cash-flow of more than €400 million for the operator for each of the past four years.

Berenberg noted that Eutelsat faces an approaching renewal of its Sky Italia contract but added that management confidence gave ground for “increased optimism as to the outcome of these negotiations”.