Q3 2022

Inmarsat today reported strong third quarter results, with revenues rising 7% to $367m and EBITDA* up 17% to $228m. Our revenues have now risen for six consecutive quarters, demonstrating robust demand for global mobility communications services and solid execution amid geopolitical and supply chain uncertainties. 

We are building momentum and are confident that revenues and EBITDA will be stronger for the full year 2022 compared to last year*. Our focus on cost discipline remains undimmed, while in parallel we continue investing to strengthen the GEO satellite and ground components of our core ORCHESTRA network. We are carefully managing the supply chain disruptions affecting the satellite communications sector and other industries. Component availability for our Maritime business is showing early signs of easing, but the overall situation remains challenging.

Highlights of our business unit performance include:  

• Maritime delivered its seventh consecutive quarter of year-on-year growth** and ended the period with a robust backlog of vessels waiting for Fleet Xpress (FX) installation. FX-installed vessels increased 16% year-on-year during the third quarter, while improved pricing for our Inmarsat-C and FX services helped average revenue per customer to stabilise. We will continue to focus on increasing the pace of installations as our team taps into healthy demand for connectivity from Maritime customers.
• Government revenues rose 4% compared to the third quarter last year. We are on track to deliver record revenues from non-US government after a 13% increase in the third quarter. Our US government business has returned to growth, with a 1% year-on-year revenue rise in the third quarter. 
• Aviation saw a slight sequential quarterly deceleration to 33% in the third quarter, compared to 48% in the second quarter. We see strong underlying demand from Aviation customers, which attests to the significant commercial opportunities for Inmarsat and other players in this market. Our three Aviation segments - IFC, business aviation and cockpit services - all expanded year-on-year. Growth in IFC sales were down sequentially due to lower hardware sales. 
• Enterprise revenues fell 13% in the third quarter, marking an improvement on the 17% decline reported in the previous quarter. The outlook for Enterprise is improving due to the increased confidence in the availability of global satellite phone components. However, we expect global supply chain challenges to persist for the remainder of the year.  
  

In the final quarter of the year, we will continue to operate our business units with a focus on cost discipline, while maintaining a healthy level of investment in innovative technologies.  We are focusing our spending on areas of greatest opportunity and intend to invest considerable sums on infrastructure and innovations that will benefit our company and customers in the future. 

We have six satellites in various stages of development, which is the most extensive pipeline in Inmarsat’s history. The UK-made I-6 F1 – the most sophisticated commercial communications satellite ever built – is on course to enter service early next year. Its ‘twin’ I-6 F2 has completed factory testing and is expected to launch in the first quarter of 2023. These six satellites will form the backbone of Inmarsat ORCHESTRA, the company’s global, multi-dimensional, dynamic mesh network.  

During the third quarter, our combination with Viasat gained national security clearance from the UK government and we recently received approval by the Foreign Investment Review Board (FIRB) in Australia. The transaction will be subject to a Phase 2 review by the UK Competition and Markets Authority (CMA) after the regulator raised some concerns about the impact of our transaction on competition in the aviation market, with a particular focus on inflight connectivity. 

We look forward to engaging with the CMA and helping it appreciate more clearly the dynamics of our industry. Competition in the IFC segment is already fierce and will become even more vigorous in the future. New entrants, including Starlink, have raised about $20bn over the past three years and massive new capacity is scheduled to come online over the coming years. The IFC segment is underpenetrated and the majority of commercial aircraft are unconnected. As a result, airline customers will have an array of providers to choose from, giving them strong purchasing power and leverage in negotiations.

The logic of our combination remains compelling. Inmarsat and Viasat have complementary capabilities and, by coming together, will be able to invest more in innovation than we would as separate entities. The industry consolidation that we have long predicted is advancing, further validating the rationale for the Viasat/Inmarsat consolidation.  

With thanks and warm regards, 

 

Rajeev Suri  
CEO