Satellite firm SES’s steady networks business drives profit beat

Satellite company SES SESFg.LU on Thursday reported stronger-than-expected quarterly core earnings helped by resilient performance in its networks business.

Satellite players such as SES and Eutelsat ETL.PA are facing challenges as traditional video revenues decline and data becomes the dominant source of satellite industry revenues.

“We have made a solid start to 2022 with a strong financial performance supporting the delivery of our full year 2022 outlook and further execution on our key strategic goals,” Chief Executive Officer Steve Collar said in a statement.

SES’s core video business reported a 6.4% fall in its quarterly revenue due to lower wholesale sales in the United States and lower volumes in the European markets.

Sales at the networks division, which provides governments, telecom firms and cruise lines with satellite connectivity, were stable at 186 million euros ($197.23 million).

The Luxembourg-based group expects new order wins to offset the impact of the U.S. withdrawal from Afghanistan, which has dented revenues from the networks business.

SES also said it expects to double the revenues of its U.S. government business following the acquisition of DRS Global Enterprise Solutions from Italian defence group Leonardo LDOF.MI announced in March.

The group reported adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 274 million euros ($290.74 million) for the first quarter, up 2.4% from a year earlier, on revenue of 448 million euros.

Analysts on average had expected adjusted EBITDA of 258.4 million euros and revenue of 438.0 million euros.

The firm, which broadcasts to more than a billion TV viewers worldwide, also confirmed its outlook for full-year EBITDA in the range of 1.03 billion to 1.07 billion euros and revenues between 1.75 billion and 1.81 billion euros. Nasdaq