PARIS — Satellite fleet operator Intelsat said revenue in 2008 grew 8 percent, and 6 percent in the last three months of the year, compared to a year earlier, and Intelsat Chief Executive David McGlade said March 18 that “to date we have not seen any material impacts from the recession.”
results follow the equally upbeat year-end financial statements of competitors SES of Luxembourg, Eutelsat of Paris and Telesat of Canada. These four companies account for around 75 percent of the annual revenue of the global commercial fixed satellite services industry. All reported higher sales, healthy satellite fill rates and continued strong backlog.
In a conference call with investors and a March 19 filing with the U.S. Securities and Exchange Commission, Bermuda- and Washington-based Intelsat said its backlog as of Dec. 31 was $8.8 billion, holding steady from three months earlier.
The 45 Intelsat satellites that are maintained fully stabilized in orbit had a fill rate of 82.7 percent as of Dec. 31, the same level as three months earlier.
Intelsat also operates seven satellites in inclined orbit, and these spacecraft are not included in the overall fill rate figures.
Inclined orbit satellites are usually spacecraft nearing the end of their service lives. To preserve fuel and squeeze out additional revenue from them before they are placed into a graveyard orbit, they are no longer maintained stable on their north-south axes.
said Intelsat is taking advantage of technology advances that have enabled inclined orbit satellites to find a wider customer base.
most notable contract win featuring an inclined orbit satellite is the multimillion-dollar deal with Astrium Services of Europe to provide narrowband and broadband links to French military unmanned aerial vehicles (UAVs) operating in Afghanistan.
The contract, signed by Intelsat’s Intelsat General government services division and Astrium Services’ London Satellite Exchange subsidiary, was announced March 2.
Intelsat agreed to reposition a steerable Ku-band spot beam on its IS-601 satellite, located at 47.5 degree east longitude, to meet the French UAV requirements for both UAV control through low data-rate transmissions, and for real-time video streaming from the UAVs to French forces. IS-601 was launched in 1991. Most satellites that age are already retired.
Intelsat reported revenue of $2.4 billion for 2008, up 8 percent from 2007. McGlade said the company is poised for further growth in 2009, with $2 billion in sales already all but guaranteed by existing contracts.
Another $1.5 billion of Intelsat backlog is scheduled to be turned into revenue in 2010, with $1.2 billion in 2011.
The company reported that earnings before interest, taxes, depreciation and amortization (EBITDA) was 78 percent of revenue in 2008 and would have been higher were it not for $11 million in unanticipated costs associated with the sale by Intelsat of two launch contracts that the company had purchased in 2005.
said Intelsat’s EBITDA for the last three months of 2008 was just 75 percent of revenue but would have been 77 percent if the resold launch options were not included.
The launch options were originally purchased in 2005 by PanAmSat Corp., a satellite operator that subsequently was acquired by Intelsat. PanAmSat booked four launches with Sea Launch Co. of Long Beach,
, for Sea Launch’s new product, called Land Launch, which operates from the Russian-run BaikonurCosmodrome in
As one of the inaugural Land Launch customers, PanAmSat received favorable prices. Intelsat subsequently sold two of the four contracts to Telesat
for the Telstar 11N satellite and to Measat of Malaysia for the Measat 1R.
11N was launched in February aboard Land Launch, and Measat 1R is scheduled for launch later this year.
Intelsat had expected the two contracts to result in a marginal profit, but Land Launch delays pushed up the cost.
“Due to some cost increases that were encountered by the launch provider, we made the judgment that it was in our best long-term interest to agree to subsidize some of those costs and pay additional money,” Intelsat Chief Financial Officer Michael McDonnell said during the conference call. He said Intelsat expects no further cost increases for the launches.
confidence in the market was recently demonstrated by the company’s decision to accelerate the purchase of three satellites, bringing to 10 the number of spacecraft that Intelsat has ordered or will order in the coming weeks.
The company’s otherwise healthy business continues to be undermined by the debt that Intelsat was laden with by private-equity investors in a series of transactions in the last four years.
The result is a net loss for 2008 of $1.2 billion, including $315 million in restructuring and transaction costs related to the most recent Intelsat purchase in February 2008. As of Dec. 31, Intelsat’s total debt was $15.2 billion.