Eutelsat Says Revenue Up Despite Satellite Loss
PARIS — Satellite fleet operator on Feb. 18 reported double-digit growth in revenue and profit for the six months ending Dec. 31 compared with the same period a year earlier and said its planned 7 percent annual revenue increase through fiscal year 2013 remains intact despite the loss of a large new satellite in October.
The W3B satellite, which was declared a total loss just after launch in October, was to have been a major contributor to Eutelsat revenue starting in 2011. The loss of this satellite will bring Eutelsat’s overall fleet-utilization rate to 90 percent — higher than the company would like — but will not force Eutelsat to sacrifice much new business, Eutelsat Chief Executive Michel de Rosen said in a conference call with investors.
Paris-based Eutelsat, which is the world’s third-largest commercial satellite fleet operator after and , both of Luxembourg, remains the most geographically concentrated of the three. It has virtually no presence in North America or East Asia, but is expanding fast in Africa, the Middle East and in South Asia, as well as Eastern Europe.
For the six months ending Dec. 31, Eutelsat reported revenue of 575.9 million euros ($777.5 million), an increase of 13.3 percent from the same period a year ago. Backlog stood at 4.9 billion euros, up nearly 17 percent.
While television broadcasting still accounts for nearly 70 percent of its business, it is Eutelsat’s value-added services, data transmissions and satellite capacity sales to governments that are growing fastest.
Eutelsat has satellites stationed at orbital positions with good look angles on South and Central Asia, and the Middle East, making it a regular supplier to the U.S. and other defense agencies active in Iraq and Afghanistan.
While Eutelsat has always described its government business, which it calls “Multi-usage,” as a sideline that may or may not continue, the business has grown fast in the past decade. For the six months ending Dec. 31, Multi-usage revenue totaled 57.3 million euros, a 29 percent increase over the same period a year ago. When the dollar’s appreciation against the euro in late 2010 is removed from the accounting, the growth was 18.5 percent, Eutelsat said.
Data services were up 25.4 percent, to 93.1 million euros, and value-added services revenue increased by 7.3 percent, to 23.8 million euros.
Eutelsat’s current fleet stands at 26 satellites, with six spacecraft on order including a W3B replacement. As of Dec. 31, the Eutelsat fleet counted 653 operational transponders, an increase of 7.2 percent in capacity over the previous year.
But despite the increased number of transponders, Eutelsat increased its fill rate, to 90.4 percent from 87.4 percent, as demand outstripped the capacity increase.
Eutelsat Deputy Chief Executive Jean-Paul Brillaud said the company, which a couple of years ago was struggling with a 95 percent fill rate, is confident it can manage its fleet so as not to lose revenue opportunities despite the high fill rate, which was exacerbated by the loss of W3B.
Eutelsat’s core video market increased revenue by 8.5 percent, to 392.1 million euros, in the six months ending Dec. 31. The growth was due to the continued increase in the number of television channels carried by the Eutelsat fleet.
Pay-television broadcasters in Russia, the Middle East, Africa and Europe led an increase of 9.7 percent, to 3,782, in the number of channels on Eutelsat’s fleet as of Dec. 31.
With its existing markets growing, the biggest near-term challenge for Eutelsat may be its Ka-Sat Ka-band broadband satellite for consumer and corporate Internet links. The satellite, launched in December, is scheduled to enter service by mid-2011.
Brillaud said the company for now is not counting on demand from military customers for Ka-Sat, which has 82 spot beams covering Europe. Ultimately, he said, Ka-Sat may be used in tandem with a Ka-band satellite system with global coverage to serve defense customers, but for now this is not high on Eutelsat’s priority list for Ka-Sat. Brillaud said about 60 percent of the 100 million euros in annual revenue Eutelsat expects from Ka-Sat by 2014 will be from individual residential consumers, with the remaining 40 percent from business-to-business applications.