Inmarsat plc reports Interim Results 2015

Continued MSS revenue growth; I-5 F3 launch now end-August

London, UK: Inmarsat plc (LSE: ISAT.L), the leading provider of global mobile satellite communications services, today provided the following unaudited information for the half year ended 30 June 2015.

Financial Headlines

  • Total revenues $616.2m (2014: $652.3m)
    • Revenues from LightSquared $35.0m (2014: $47.1m)
  • Wholesale Mobile Satellite Service (MSS) revenues $403.8m, up +4.2% (2014: $387.6m)
  • Total EBITDA1 $342.7m (2014: $369.7m)
  • Profit after tax $131.6m (2014: $136.7m)
  • Interim dividend increased by 5% to 19.61 cents/share (2014: 18.68 cents/share)
  • Net debt at 30 June $1,921.6m (31 December 2014: $1,900.7m)

Operational Headlines

  • I-5 F3 launch now re-scheduled for end of August; targeting GX global commercial service introduction by year-end
  • Continuing strong commercial and technical progress in developing European Aviation Network and global aviation passenger connectivity business

Second Quarter Financial Headlines

  • Total revenues $311.4m (2014: $307.6m)
    • Maritime down $5.3m to $147.3m (-3.5%)
    • Government down $10.1m to $70.4m (-12.5%)
    • Enterprise up $0.5m to $40.4m (+1.3%); underlying growth (excl. disposal) +8.9%
    • Aviation up $7.0m to $30.8m (+29.4%)
    • $17.5m from LightSquared (2014: $1.8m)
  • Wholesale Mobile Satellite Service (MSS) revenues $205.6m, up 4.8% (2014: $196.1m)
  • EBITDA1 $165.9m (2014: $159.8m)

Rupert Pearce, Inmarsat’s Chief Executive Officer, commented:

The return to flight of the Proton launch vehicle after a three-month suspension is welcome news. A successful launch of I-5 F3 in late August will enable us to introduce global GX commercial services by the end of this year, providing a major catalyst for a step-change in revenue and EBITDA growth in 2016. We remain confident that GX will deliver incremental run-rate revenues of at least $500m per annum within five years from the launch of global services.

Our wholesale MSS revenue grew by 4.8% in the second quarter, reflecting the continuing expansion of global demand for mobile data, and the enduring capabilities of our L-band services, delivering the service speed, reliability and global coverage that are vital for our customers.

Total revenue performance in the quarter across the Group was mixed. Aviation again grew strongly, driven by both higher connections and higher ARPU across the product range. Our government business in the US was more resilient than expected, but this was offset by a tougher market in some non-US countries, mainly due to lower levels of operational activity.

In Maritime, FleetBroadband revenue continued to perform well, with revenue up 17% and ARPU up 10% in the quarter, and VSAT also delivered a solid 11% revenue growth. Growth in these two services, which now account for more than 75% of total Maritime revenue, was offset by an accelerating (and expected) decline in legacy MSS and non-MSS revenues. Fleet revenue fell by 55% in the quarter and other legacy MSS and non-MSS services, such as terminal sales and third-party products, declined by 24% in the quarter. This changing revenue mix, towards higher margin next generation services, was reflected in the higher EBITDA margin reported by Maritime in the quarter.

Development of our aircraft cabin connectivity opportunities, both in Europe with our European Aviation Network, and globally with GX, is moving forward rapidly, and we are close to finalising several major airline contracts, as well as development agreements for rolling out the S-band satellite and complementary ground networks in Europe and delivering the cabin connectivity service.

We have declared an interim dividend of 19.61 cents per share, 5% higher than last year, reflecting the Board’s confidence in the sustainable long-term growth trajectory of the business.


No material change in the trading environment or in the Group’s performance is expected in the second half of 2015, and we continue to expect underlying growth in Maritime, Enterprise and Aviation, with continued weakness in Government.


For the full year 2015 total Group revenue is expected to be in the range $1,250m to $1,300m. This includes revenue of $70 million expected to be received from LightSquared during the full year, and reflects the lower GX revenue expected in the second half due to the recent delay in GX global commercial service introduction.

The Group’s longer-term revenue guidance for GX is unchanged:

  • Annual GX revenues of $500m are expected by the fifth anniversary of the global launch of commercial GX services.

Further medium-term revenue guidance will be published later in the year, after I-5 F3 is launched successfully.


Capex guidance is unchanged

  • 2015 full year capex is expected to be in the range $450-$500m
  • Capex in each of 2016 and 2017 is currently expected to be less than $400m

Net debt

In respect of the capital structure of the Group, the company expects normally to maintain net debt at less than 3.5 x EBITDA.

Non-Executive Directors

As outlined in the Annual report, the company has been considering succession planning for the longer serving Non-Executive Directors of the Board, and today announces the following changes, to take effect from 6 November 2015.

  • Mr John Rennocks, currently Deputy Chairman, Senior Independent Non-Executive Director and Chairman of the Audit Committee, will relinquish these appointments and will retire from the Board.
  • Mr Andrew Sukawaty, Chairman of the Board, will step down as Chairman of the Nominations Committee, but will remain a member of the Committee.
  • Dr Abraham Peled, currently an Independent Non-Executive Director and member of the Nominations Committee, will be appointed as Senior Independent Non-Executive Director and Chairman of the Nominations Committee.
  • Mr Robert Ruijter will be appointed as Chairman of the Audit Committee.

Forward looking Statements

This announcement contains “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those projected in the forward-looking statements. These factors include: general economic and business conditions; changes in technology; timing or delay in signing, commencement, implementation and performance or programmes, or the delivery of products or services under them; structural change in the satellite industry; relationships with customers; competition; and ability to attract personnel. You are cautioned not to rely on these forward-looking statements, which speak only as of the date of this announcement. We undertake no obligation to update or revise any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances.

Other Information

While Inmarsat plc is the ultimate parent company of our group, our subsidiary Inmarsat Group Limited is required by the terms of our Senior Notes to report consolidated financial results on a quarterly basis. A copy of the resulting financial report for Inmarsat Group Limited will be available via the Investor Relations section of our website.


[1]  EBITDA is defined as profit before finance income and expenses, taxation, depreciation and amortisation, losses on disposal of assets, impairment losses and share of profit of associates

Inmarsat plc – Contacts

Investor Enquiries:

David Boyd
Tel: +44 (0)20 7728 1518
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Media Enquiries:

Chris McLaughlin
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