Telenor Forecasts Profit Rebound on Strength of Thor 6
PARIS — Satellite fleet operator Telenor Satellite Broadcasting of Norway reported a drop in revenue and profit for the three months ending Sept. 30 but said it expects to return to previous levels in the coming months as high-definition television expands in its home markets and as the new Thor 6 satellite increases Telenor’s reach in Central and Eastern Europe.
Oslo-based Telenor’s Thor 6 satellite was successfully launched Oct. 29 and is expected to enter service at Telenor’s 1 degree west orbital slot in January. Thor 6 carries 36 Ku-band transponders, 16 of which will be used to bolster Telenor’s Nordic presence. The remaining 20 transponders will be used to expand in Central and Eastern Europe, which Telenor views as its biggest near-term growth potential.
For the nine months ending Sept. 30, Telenor said its revenue from Central and Eastern European markets increased by 63 percent compared to the same period in 2008.
Telenor reported total revenue of 256 million Norwegian kroner ($43.9 million at Sept. 30 exchange rates), of which 32 percent was from the company’s business outside the Nordic region.
For the three months ending Sept. 30, Telenor’s earnings before interest, taxes, depreciation and amortization (EBITDA) was 63 percent of revenue, down from the company’s normal 70 percent margin.
Telenor officials said the drop in gross margin was largely due to spending on a contract with Orbital Sciences Corp. of Dulles, Va., to build components of a Thor 6 replacement satellite if Thor 6 had failed at launch or in early-orbit testing. With Thor 6 healthy in orbit, that contract has been canceled, they said.
Telenor Satellite Broadcasting Chief Executive Cato Halsaa said the company nonetheless will begin early designs of a possible Thor 7 in the coming months, although it is not expected to order Thor 7 anytime soon.
Once in service at 1 degree west, Thor 6 will free up the Thor 3 satellite, a small Boeing-built spacecraft launched in 1998 that Telenor officials say could be leased or sold to another satellite operator with a near-term requirement to fill an orbital slot. That would leave Thor 5, Thor 6 and Telenor’s share of the 10-02 satellite at 1 degree west.
For 2010, Telenor officials expect that the continued rollout of high-definition television by its principal satellite-television customer, Canal Digital of Norway, will help boost revenue, as will contracts in Central and Eastern Europe that will take effect in 2010.