Eutelsat shares hit record low as falling broadcast sales weigh on earnings

Eutelsat on Friday missed expectations for half-year core profit, weighed down by lower revenues for its broadcasting business and higher operating costs.

The world’s third largest satellite operator posted earnings before interest, taxes, depreciation and amortisation (EBITDA) of 419 million euros ($445.61 million) for the first half of its financial year, below analysts’ estimate of 426 million euros in a company-provided poll.

Eutelsat is looking to tap into the rising demand for fast internet connections from companies, which increasingly rely on cloud computing services to run daily operations, to offset a gradual decline of its business distributing TV channels worldwide.

Half-year revenue in its broadcasting division dropped to 338.5 million euros from 350.5 million a year earlier.

Eutelsat, which is merging with British rival OneWeb in a closely-watched deal by the French and UK governments, said its operating costs were 18 million euros higher than last fiscal year due to “bad debt” and higher staff costs.

Its EBITDA margin fell to 72.9% at constant currency, compared with 76.1% a year earlier. Nasdaq