Inmarsat plc reports Preliminary Full Year Results 2014

05 March 2015: Inmarsat plc today provided the following information for the twelve months ended 31 December 2014. Please visit the Investors section of the website to view the full results.

Full Year Financial Headlines

  • Total revenues $1,285.9m (2013: $1,261.9m)
    • Maritime up $70.8m to $595.6m (+13.5%); underlying growth (excl. acquisition) +3.2%
    • Government down $88.4m to $319.9m (-21.7%)
    • Enterprise down $54.9m to $166.7m (-24.8%); underlying growth (excl. disposal) +6.2%
    • Aviation up $27.7m to $101.1m (+37.7%)
    • $75.4m from LightSquared (2013: $12.3m)
  • Wholesale Mobile Satellite Service (MSS) revenues $791.4m, up 3.8% (2013: $762.4m)
  • EBITDA $701.0m (2013: $648.8m)
  • Profit after tax $341.1m (2013: $102.6m)
  • Final dividend increased by 5% to 30.26 cents/share (2013: 28.82 cents/share)

Business Highlights

  • Global Xpress (GX) commercial services started on Inmarsat-5 F1 on 1 July 2014; I-5 F2 launched successfully on 1 February 2015
  • European aviation network programme announced; first MSS and ground licences acquired
  • Acquisition of Globe Wireless, disposal of retail energy related assets and 19% stake in SkyWave
  • Issue of $1 billion of 4.875% Senior Notes due 2022
  • Innovative new products and services launched across all Business Units

Fourth Quarter Financial Headlines

  • Total revenues $333.0m (2013: $314.8m)
    • $18.5m from LightSquared (Q4 2013: $2.4m)
  • Wholesale Mobile Satellite Service (MSS) revenues $211.8m, up 9.0% (2013: $194.4m)
  • EBITDA1 $165.3m (2013: $150.9m)

Rupert Pearce, Inmarsat CEO, commented:

“2014 was a year of solid delivery for Inmarsat and also a year in which we took major steps towards delivering the compelling growth opportunities that will transform our business.

“Continuing underlying L-band growth in Maritime, Enterprise and Aviation during the year was offset by continued weakness in our Government business in the US, although this decline slowed towards the end of the year. Helped by a strong Aviation performance, our wholesale MSS revenue growth accelerated in the fourth quarter. Including $75.4m of revenue from LightSquared, our total revenues for the year grew by 1.9%.

We started offering commercial GX services from our first I-5 satellite in July, and the response from customers has been very favourable – the experience GX delivers is better than expected. Our second satellite was launched successfully on 1 February, and with the third currently on schedule to follow in the second quarter, we remain on track to launch commercial GX service globally early in the second half of this year.

Global demand for high-speed mobile data communications continues to surge ahead. GX will transform the experience for broadband users at sea, in the air and in remote locations, connecting them to the data-rich services and applications that are now a core part of everyday work and life.

In 2014 we added a third technology, S-band, into our growth road-map, with the decision to invest up to $450m in a hybrid satellite and ground-based network in Europe. From late 2016 this will complement our global GX service by delivering a cost-effective and technically efficient solution for airlines to meet the demand for connectivity from their passengers flying over Europe.

We expect 2015 to be another year of building for the medium-term, with continuing steady growth in L-band in all our businesses except Government, particularly in the US, and benefitting from some early stage GX revenues. We will focus hard on delivering the remainder of our GX investment programme, and on building momentum in Aviation, with major progress in our S-band programme.”

Outlook and Guidance

The trading environment in 2015 is expected to be broadly similar to 2014, with continuing underlying revenue growth in Maritime, Enterprise and Aviation and some continued weakness in Government, particularly in the US.

Our longer-term revenue expectations remain unchanged. We continue to expect wholesale MSS revenue to fall within the 8-12% CAGR growth range for 2014-16, and we expect annual GX revenues of $500m by the fifth anniversary of the global launch of commercial GX services.

Capex in 2015 is expected to be in the range $450-500m, as guided previously.  We expect capex in 2016 and 2017 to be below $400m.

EBITDA is defined as profit before finance income and expense, taxation, depreciation and amortisation, losses on disposal of assets, impairment losses and share of profit of associates.