The Board of Directors of Eutelsat Communications, chaired by Dominique D’Hinnin, reviewed the financial results for the year ended June 30, 2020. According to the full year 2019-2020 results, Eutelsat has reported operating verticals revenues of $1.4bn, exceeding Covid-revised objective. The satellite operator reported a record level of discretionary Free-Cash-Flow at $555m.
Further, net debt/EBITDA ratio contained at 3.05x reflecting strong financial discipline.
Revenues of the five operating verticals (ie, excluding other revenues) stood at $1.49bn. They were down by 3.9% on a like-for-like basis excluding a negative perimeter effect of circa 0.1 point (disposal of the stake in EUTELSAT 25B in August 2018) and a positive currency effect of c. 1.3 points.
Q4 revenues stood at $375m down 2.1% on a reported basis and by 4.4% like-for-like. Revenues of the five operating verticals stood at $371m, down 4.3% year-on-year and 2.1% quarter-on-quarter on a like-for-like basis.
FY 2019-20 broadcast revenues were down 1.2% like-for-like to $920m. They reflected notably lower revenues at 36°East (return of a couple of transponders in Russia) and 7°East (termination of a contract in Sub-Saharan Africa). Q4 revenues stood at $299m, down by 1.5% year-on-year and by 1.4% quarter-on-quarter with net one-off items representing most of the sequential decline.
Commenting on the report, Rodolphe Belmer, CEO of Eutelsat Communications, said: “Eutelsat has produced a robust set of results for Financial Year 2019-20 in the face of the Covid-19 headwinds, with a record level of Discretionary Free Cash Flow and an EBITDA margin that remains industry leading. Our core Broadcast business remains resilient, as demonstrated by the securing of a number of new contracts in Sub-Saharan Africa, notably with Canal+ Ethiopia. We have also made significant headway in our Fixed Broadband strategy ahead of entry into service of EUTELSAT KONNECT.
“In Europe, a major wholesale agreement has been signed with Orange for the entire French capacity of EUTELSAT KONNECT and we are adding a retail pillar to our distribution strategy with the acquisition of the European satellite broadband activities of Bigblu Broadband, the leading distributor of satellite Broadband in Europe. In Africa the Schoolap project in DRC highlights the opportunities in the business-to-government vertical.”
Belmer further added: “As a result, the coming year is expected to mark a turning point for our Fixed Broadband vertical, with the ramp-up of EUTELSAT KONNECT, to be followed in subsequent years by further incremental Connectivity capacity, namely KONNECT VHTS and EUTELSAT 10B, adding traction to our return to growth strategy. We continue to experience the effects of the global health crisis most notably in the Mobile Connectivity vertical and to a lesser extent in Professional Video. Nevertheless our confidence in the resilience of core Broadcast and improving trends in the other verticals enable us to reinstate financial objectives. As a measure of financial prudence, and as previously announced, we are recommending a 30% reduction in dividend for FY 2019-20. We are committing to a return to our policy of a stable to the progressive dividend in respect of FY 2020-21, based on the rebased dividend.”