Inmarsat plc reports Third Quarter Results 2014

Core growth, as new constellation heads for completion

London, UK: 6 November 2014.  Inmarsat plc (LSE: ISAT.L), the leading provider of global mobile satellite communications services, today provided the following information for the three months ended 30 September 2014.

Third Quarter Highlights

  • Total revenues $300.6m (2013: $306.9m)
    • Maritime up $15.2m to $147.6m (+11.5%); underlying growth (excl. acquisition) +2.0%
    • Government down $17.8m to $76.3m (-18.9%)
    • Enterprise down $12.1m to $40.9m (-22.8%); underlying growth (excl. disposal) +17.6%
    • Aviation up $2.5m to $20.7m (+13.7%)
  • Global Mobile Satellite Service (MSS) revenues $192.0m, up 2.3% (2013: $187.6m)
  • $9.1m payment received from LightSquared
  • Total EBITDA[1] $166.0m (2013: $168.7m)
  • Profit before tax $104.1m (2013: $23.5m)

Operational Highlights

  • Global Xpress commercial services started on Inmarsat-5 F1 on 1 July 2014
  • IsatHub launched worldwide, enabling connectivity for smartphones and tablets
  • Operations expanded in China, and Inmarsat office opened in Beijing

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

“Inmarsat continued to make good progress in the third quarter, delivering core business growth and moving ahead towards completion of the Global Xpress constellation.

Global Xpress service from our first Inmarsat-5 satellite was launched at the start of the quarter and is delivering operational performance ahead of expectations. Following Proton’s return to flight in the quarter, and a second successful launch in October, we currently expect our two remaining I-5 satellites to launch in early 2015. This puts us on track for global introduction of GX services early in the second half of 2015 and we remain confident that we will deliver our 2014–16 MSS revenue growth target of 8-12%, and generate annual GX revenues of $500m by the fifth anniversary of the launch of global GX services.

All of our businesses performed in line with our expectations during the quarter. Underlying revenue growth continued in Maritime, Enterprise and Aviation (excluding the impact of acquisitions and disposals) driven by customer growth and higher ARPU across many of our product ranges.  In Government we saw the continuing revenue impact of budgetary pressures and reduced operational requirements, partially offset by encouraging developments in the newer markets we are targeting.”

Outlook

The trading environment seen in the third quarter is expected to continue through the remainder of 2014, with continuing weakness in Government, and underlying revenue growth in our other three businesses (excluding the impact of acquisitions and disposals).

We now anticipate that operating costs in the full year 2014 will be slightly lower than previously expected.

Capex for the full year 2014 is expected to be around $450m, and capex for the full year 2015 is expected be in the range of $450m-$500m. This profile reflects our current expectation that the two remaining Inmarsat-5 satellites will be launched in early 2015.

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

Results Conference Call

Inmarsat management will discuss the third quarter results in a conference call on Thursday 6 November 2014 at 0800 hrs London time. To access the call please dial +44(0)20 3450 9987. The conference id for the call is 8378701. The call will be recorded and available for one week after the event. To access the recording, please dial +44(0)20 3427 0598 and enter the access code 8378701.

Forward-looking Statements

Certain statements in this announcement constitute “forward-looking statements”. 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.

Contact: Inmarsat plc, London, UK

Investor Enquiries:
David Boyd
Tel: +44 (0)20 7728 1518
david.boyd@inmarsat.com
Media Enquiries:
Chris McLaughlin
Tel: +44 (0)77 9627 6033
christopher.mclaughlin@inmarsat.com

[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.