SES looking for price financial savings to sort out video woes

TAMPA, Fla. — SES is searching for methods to chop prices because the lack of revenues from a bankrupt broadcast buyer in Brazil offers a blow to the satellite tv for pc operator’s declining video enterprise.

Whereas SES stated Aug. 1 it has secured revenues from this buyer for the remainder of the yr, the Luxembourg-based operator is bracing for a 5% hit to annual media income in 2025. That is on high of an ongoing single-digit decline as satellite tv for pc TV prospects change to on-line streaming companies.

SES declined to reveal the published buyer, which is probably going Oi, one of many largest telcos in Latin America.

In an earnings name with analysts, SES CEO Adel Al-Saleh stated the operator will first look to mitigate the lack of the long-term broadcast contract by way of a cost-saving drive that he didn’t element.

SES may also search extra revenues from its sports activities and occasions broadcasting enterprise, the place progress partially offset the video division’s 6.7% year-on-year decline to 453 million euros ($489 million) for the primary six months of 2024, when adjusted for international alternate charges.

Al-Saleh stated the multi-orbit operator may also lean on a networks division that grew 5% over the identical interval to 523 million euros, representing 54% of complete revenues.

The networks progress was pushed by the corporate’s cellular broadband companies enterprise, the place revenues jumped greater than 11% amid sturdy demand within the maritime and aviation markets.

Authorities connectivity revenues additionally soared 8.4% following preliminary companies in April from O3b mPower, the operator’s next-generation constellation in medium Earth orbit (MEO).

Al-Saleh hinted at a number of extra contracts within the close to time period with authorities prospects, which SES is prioritizing as energy points restrict capability on preliminary O3b satellites. 

“[O3b] mPower is seeing a really sturdy demand from the governments,” he stated, including he was “hoping to announce a contract this name, however we can be saying a number of contracts over the subsequent a number of months” that underline this demand.

SES, which additionally operates geostationary spacecraft, has six O3b mPower satellites in MEO and expects SpaceX to launch one other two towards the tip of this yr, adopted by three extra satellites in 2025. The corporate plans to deploy the ultimate two satellites within the 13-strong Boeing-built constellation in 2026.

Fastened hassle

Though the networks division was a vivid spot within the earnings outcomes, SES additionally reported an 8.1% drop in fastened information revenues.

One-off offers from the earlier yr have been the primary driver for this decline, in line with SES, including that it additionally skilled difficult circumstances in Europe.

“That could be a phase that we’re wanting very, very laborious at,” Al-Saleh stated, together with efforts to focus capability away from extremely price-sensitive areas.

General, SES reported 978 million euros in group income, down 0.6% year-on-year. 

Adjusted EBITDA (earnings earlier than curiosity, taxes, depreciation and amortization) slipped 0.9% to 525 million euros.

SES nonetheless expects to report between 1.94 billion euros and a couple of billion euros in annual income for 2024, and stated it’s monitoring towards the higher half of a beforehand forecasted EBITDA of between 950 million euros to 1 billion euros.

The corporate additionally stated its proposed $3.1 billion acquisition of geostationary connectivity operator Intelsat stays on observe to closing within the second half of 2025, topic to regulatory approval, after not too long ago securing debt to help the deal.

Associated