Intelsat Exec Says Market Outside Asia Remains Robust

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  Space News Business

Intelsat Exec Says Market Outside Asia Remains Robust

By PETER B. de SELDING
Space News Staff Writer
posted: 19 May 2008
12:03 pm ET



PARIS
�- Satellite-fleet operator Intelsat said May 15 that demand for satellite capacity continues to grow in most places around the world except the Asia-Pacific region. The company reported that revenue
�for the three months ending March 31 grew by 11 percent over the same period last year
, to $572.7 million,
�and 13 percent if its declining point-to-point telecom-trunking business is excluded.

 

In a conference call with investors, Washington-based, Bermuda-headquartered Intelsat said its Intelsat General division, which sells capacity to
U.S. and other government customers, rose by 16 percent compared to the same period a year earlier.

 

Intelsat Chief Executive Dave McGlade said demand for Ku-band satellite capacity continues to be strong in North America – a different assessment from that given May 13 by Charlie Ergen, chairman of Intelsat competitor EchoStar Corp., who said the North American market was “relatively soft.” McGlade said Intelsat has seen “a notable pickup in Latin America” as well.

 

Intelsat remains heavily indebted, with debt service costs of $304.7 million for the three months ending March 31. The company’s purchase earlier this year
by a group of private-equity companies led by BC Partners Holdings Ltd. and Silver Lake Partners added $3.7 billion to the debt.

 

Intelsat’s 11 percent increase in revenue
�was offset by $308.3 million in restructuring and transaction charges accompanying the February
purchase. The charges included $60 million in sponsor fees and $55 million in professional fees.

 

Intelsat’s total debt as of
March 31 was $15.2 billion, the company said in a May
15
�filing with the U.S. Securities and Exchange Commission.

Despite the high debt
, McGlade said Intelsat is sticking with its plans to invest $460 million to $500 million this year on new satellites and other capital equipment. Intelsat has five satellites on order, two of which are scheduled for launch this year.

 

Thierry Guillemin, Intelsat’s chief technical officer, said during the call that the company expects to order “several” new satellites this year and
currently is reviewing manufacturers’ proposals on bid requests Intelsat issued.

 

Intelsat said its EBITDA, or earnings before interest, taxes, depreciation and amortization, was 79.9 percent of revenue
. Its 53-satellite fleet was 78 percent booked as of March 31, up from 76 percent as of Dec. 31, McGlade said.

Comments: pdeselding@gmail.com