Inmarsat Profitability Slows in 2006; Holds out for a Better 2007

LONDON, Feb. 28, 2007/Satnews Daily/ ― London-based satellite services provider Inmarsat Holdings Ltd attributed its lower profitability in 2006 to depreciation costs arising from its Inmarsat-4 satellites but held out hope for a more robust 2007.

Inmarsat said pretax profit for 2006 stood at $89.8 million, a drop of some $6 million from 2005. Revenues, however, improved to $500 million, a gain of 4 percent year-on-year while earnings before interest, taxes, depreciation and amortization rose 5 percent to $332 million.

Revenues from the maritime industry, Inmarsat's biggest market, rose 7 percent on a continuing expansion in global shipping fleets and a resulting higher demand for data services. Revenues from the aeronautical industry jumped 35 percent.

Inmarsat said a stronger-than-expected fourth-quarter could likely herald higher revenues this year. Analysts predict an 8 percent revenue growth for Inmarsat in 2007.

Inmarsat chairman and chief executive Andrew Sukawaty said the company in 2006 delivered on its target of accelerated revenue growth while maintaining strong growth in operating cash flows.

"In 2007, we will see the first full-year contribution from BGAN (Broadband Global Area Network) and begin the rollout of our first handheld satellite phone service. Together with the ongoing healthy growth in our core maritime and aeronautical businesses, we are on track to meet our objectives for 2007," he explained.

Sukawaty said the third satellite in Inmarsat's new, 4th generation I-4 fleet will probably be launched in 2008 to cover gaps in its Asia Pacific coverage. The two in-orbit I-4 satellites were launched in 2005. These satellites make possible the high-speed data delivered via BGAN.

Inmarsat said the launch of the third satellite will be important to the success of a global hand-held service. Inmarsat said global I-4 coverage will enhance the BGAN service and provide incremental opportunities for new broadband maritime and aeronautical services to be launched on the new satellite. 

BGAN terminals (or digital radios) are about the size of a notebook computer but can deliver data three times faster than previous units. Services provided by Inmarsat terminals include voice calls, low-level data tracking systems, high-speed data services and distress and safety services.

Inmarsat is to launch its in-flight mobile phone service this July. In addition to mobile phone calls, the service will also give users broadband Internet connections for personal digital assistants (PDAs) and laptops.

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