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Yahsat receives $5.1bn contract from UAE government

The new mandate will replace two current agreements, which come to an end in November and December 2026, respectively.
Ali Al Hashemi, Group Chief Executive Officer at Yahsat

Yahsat Government Solutions has received Authorisation to Proceed (ATP) from the UAE Government to deliver satellite capacity and managed services for a period of 17 years. This significant mandate, valued at AED 18.7bn ($5.1bn), consolidates various related services encompassing ground segment satellite systems and terminals, which were previously covered by separate agreements.

The new mandate will replace two existing contracts, the Capacity Services Agreement (CSA) and the Managed Services Mandate (MSM), which are set to conclude in November and December 2026, respectively. Under this new arrangement, Yahsat will provide the government with secure and dependable satellite capacity and associated managed services. This will be facilitated through the utilisation of the existing Al Yah 1 and Al Yah 2 satellites, along with the introduction of two new satellites, Al Yah 4 (AY4) and Al Yah 5 (AY5), expected to be launched in 2027 and 2028, respectively.

This development underscores Yahsat’s long-standing relationship with the government, dating back nearly two decades to the company’s inception. It highlights Yahsat’s pivotal role as the preferred and trusted provider of secure satellite capacity and solutions to the government. Moreover, it substantially augments the group’s contracted future revenues to AED 25.7bn (7.0bn), which is more than 16 times its 2022 annual revenues. This extends the backlog well beyond 2040, providing assurance and visibility into future cash flows.

Yahsat had previously entered into an Authorisation-to-Proceed agreement with Airbus (Airbus ATP) in June 2023 for the construction of AY4 and AY5. This arrangement ensures adherence to the programme schedule and allows for the commencement of specific activities such as system requirements review, design work, and procurement for long-lead items. Funding for AY4 and AY5, encompassing spacecraft, ground segment infrastructure, launch, and insurance, will be sourced from Yahsat’s internal resources as well as potential alternative funding options currently under evaluation. Additionally, the UAE Government has provided an advance payment of USD 1bn, scheduled to be received in 2024.

Commenting on this key milestone, Musabbeh Al Kaabi, Chairman of Yahsat, said: “We are honoured to secure the continued trust of the UAE Government to provide critical, secure communication services for a further 17 years beyond 2026. This award is a testament to our long-standing relationship with the government and the quality of service that we provide as we continue to strive to consistently exceed customer expectations. By complementing our existing fleet with Al Yah 4 and Al Yah 5 next-generation satellites, we will be able to serve the government with new cutting-edge solutions that are not currently possible. The performance of the new satellites is expected to significantly surpass current industry capabilities including capacity, coverage and flexibility allowing us to offer a wide range of next-generation applications to our end user. We are excited by this new journey and look forward to serving our customers with true operational excellence.”

Ali Al Hashemi, Group Chief Executive Officer at Yahsat, added: “We are delighted to receive this mandate, which allows us to continue to provide capacity and related services to the UAE Government beyond 2026 using our current satellite fleet, and beyond 2040 on two new satellites, which are already under construction. This is a new chapter in Yahsat’s momentous journey serving the satellite communications requirements for the UAE Government. The AED 18.7bn ($5.1bn) mandate positions Yahsat for sustainable future growth, alongside other ambitious projects in the pipeline. Our financial position has never been stronger and we now enjoy a contracted revenue backlog of AED 25.7bn ($7bn) or over 16 times annual revenues based on backlog figures at the end of the second quarter. Representing one of the largest backlog multiples and strongest balance sheets in the industry, we remain optimistic about providing a broader, more diverse and cutting-edge solutions portfolio to both the government and our customers.”