PARIS —, the world’s third-largest satellite fleet operator, on July 31 reported a 7.2 percent increase in revenue for the year ending June 30 and said it now expects to maintain an average annual growth of 7 percent through 2012.
Both figures exceed forecasts Eutelsat issued just six months ago. The company reported 940.5 million euros ($1.32 billion) in revenue for the 12 months ending June 30 and now expects to cross the billion-euro revenue mark in its current fiscal year — a year ahead of schedule.
The Paris-based operator, which is in the unusual position of having a fleet that, until several months ago, was filled to capacity, said it will succeed in reducing its fill rate to around 80 percent of commercially available transponders by the end of 2011.
With television demand remaining strong in Europe and in Eutelsat’s other coverage areas in the Middle East, the Indian Ocean region, Russia and Africa — and demand from U.S. and other government users continuing to increase in the Middle East — Eutelsat was flirting with a fill rate of 93 percent a year ago and 97 percent as of December.
The company has since launched three satellites. In a complicated series of interrelated maneuvers, the addition of these three satellites permitted Eutelsat to move five in-orbit spacecraft to new locations, where their available capacity is put to better use.
The result has been to reduce the fill rate to 88.8 percent as of June 30.
“We are happy to have been able to bring it down,” Eutelsat Deputy Chief Executive Jean-Paul Brillaud said during a July 31 conference call with investors. “We have proved we have been able to operate with a fill rate of 97 percent, but we are not comfortable with that.”
To retain in-orbit flexibility and to react to new demand, Brillaud said, Eutelsat wants the fill rate to drop to 80 percent.
Unlike its two larger rivals,of Luxembourg and of Bermuda, Eutelsat has not counted on acquisitions to grow, and has not established a presence worldwide. It has only limited business in the Americas, and not much in East Asia either.
Eutelsat Chief Executive Officer (CEO) Giuliano Berretta, in his last annual-results presentation as CEO — he will step down in November but remain chairman — said the company’s strategy of incrementally expanding slightly westward and eastward of its core West European satellite-television market has proved itself.
Eutelsat in recent years has presented itself as the most profitable of the major satellite fleet operators in terms of EBITDA, or earnings before interest, taxes, depreciation and amortization. For the year ending June 30, the company reported an EBITDA margin of 78.9 percent.
Berretta said his confidence about the near term is based in part on the fact that the company in the past year has been able to squeeze out a 7.2 percent growth despite the fact that, for much of the year, it had no room for new customers on much of its fleet.
What Eutelsat has been able to do is to move existing satellites to different slots where Eutelsat has rights to additional broadcast frequencies. A satellite with 32 physical transponders that can only use, for instance, 28 of them at one slot, is moved to a slot where it can sell all 32.
As a result, Eutelsat reported that its core video business was able to add a substantial number of new television channels in the past year. From the company’s 7 degrees west slot, the television channel growth was 34.1 percent in the Middle East and North Africa.
From 9 degrees east, the channel growth was 96 percent, to 245. Russian and African television channels grew 15.3 percent, to 451, using Eutelsat’s 36 degrees east slot.
All told, Eutelsat had 589 transponders available in orbit as of June 30, up from 501 in June 2008.
The growth was not limited to television. In what Eutelsat calls its Multiusage division — government services — the company reported a 29.8 percent growth in revenue, to 75.4 million euros, in the last 12 months. Berretta said contracts for these services, much of them sold for use by the U.S. Defense Department, are being renewed at higher rates than the contracts they replace.
Brillaud said that if the increased value of the dollar relative to the euro is removed from the calculation, the Multiusage division’s growth was still 18 percent.