Eutelsat Announces Third Quarter 2006-2007 Revenues
PARIS, France, May 11, 2007 - Satnews Daily - Eutelsat Communications (Euronext Paris: ETL), one of the world's leading satellite operators, reported improved revenues for third quarter ended March 31 and for the first nine months of fiscal 2006-2007, with video applications driving this growth.
Revenues for third quarter 2006-2007 were $278 million, up 5.4 percent compared to the third quarter of the preceding fiscal year. At constant exchange rates, revenues show a 7.2 percent increase. Revenues from video applications of $201 million accounted for 72 percent of total company revenues for the quarter, and represented a 17 percent improvement year-on-year.
Revenues from data and value added services fell 3.1 percent to $53 million from $57 million. Revenues for other services during the quarter under review were also lower than the comparable quarter in 2006.
This quarterly result reflects Eutelsat’s determination to grow video applications both in Western Europe and in the “Second Continent” (the Middle East and Russia). This segment recorded a 12.7 percent increase in revenues compared to the third quarter of last year. The number of channels broadcast by Eutelsat's fleet reached 2,505 at March 31, 2007, up by 76 channels since December 31, 2006.
Compared with the same period of the preceding fiscal year, year-to-date revenues were up 5.2 percent at $838 million. They include $15.4 million of penalties related to late delivery of the Hot Bird-7A satellite. At a constant exchange rate, revenues were up 6.5 percent. Excluding one-off revenues and at a constant exchange rate, growth was 7.7 percent.
Eutelsat chairman and CEO Giuliano Berretta said the company’s revenue growth in its third quarter confirms the attraction of its orbital positions in rapidly expanding markets for digital broadcasting and broadband services in Europe, Russia, the Middle East and Africa.
“As capacity demand in these regions maintains its sustained growth, we have continued to implement a development model which favors visibility and growth, increasing to 72% the share of Video Applications in total year-to-date revenues. In the same dynamic, the number of TV channels broadcast by our satellites has broken the barrier of 2,500, strengthening Eutelsat's position as Europe's leading satellite operator in video broadcasting markets.
“In parallel, our Value Added Services posted double digit growth, mainly driven by demand for broadband in regions with limited coverage from terrestrial networks. This quarter was also marked by take-up of in-flight Internet access services for the business jet market in Europe.
“Consistent with the roadmap to develop our in-orbit resources, we have also opened a new position at 4 degrees East through the redeployment of the Eurobird-4 satellite, taking to 18 the number of positions operated by our Group.
“With three quarters of the financial year behind us, we are in good position to increase our revenue objective to more than 815 million euros for fiscal 2006-2007 and to raise to 78% our EBITDA margin objective which was initially set at 77%".
Key highlights of this quarter include:
The Hot Bird (13 degrees East) premium video neighborhood gained new international channels including Russian information channels RBC-TV and Vesti 24, the French news channel France 24, Tunisia's Nessma TV and the Qatari channel Al-Jazeera Documentary. These new channels contribute to consolidating the leadership of Eutelsat's Hot Bird position, whose audience stands at 121 million satellite and cable homes in Europe, the Middle East and North Africa, of which 47.6 million homes are equipped for Direct-to-Home reception.
This segment also benefited from sustained demand for capacity from the Group's Second Continent, notably from the Middle East and Russia to support development of existing pay-TV platforms and the launch of a new pay-TV offer in Russia by the Tricolor TV platform.
Data and value added services, which constituted 19 percent of third quarter revenues, were down by $4.2 million compared with third quarter 2005-2006. This decrease mainly reflects reallocation to video applications of capacity previously leased for data services following expiration of corresponding contracts, and transformation of some short-term contracts to long-term contracts providing greater visibility. However, decrease of this segment was partially offset by strong revenue growth from value added services, up 13.9 percent to $11.5 million.
Growth of value added services was principally driven by continued deployment of D-STAR terminals, which deliver broadband access to areas not covered by terrestrial networks, in particular in Europe and in Africa. Value added services recorded during the quarter their first successes in the market for in-flight Internet access on business jets. Developed in partnership with ViaSat, this service is commercialized in Europe by Arinc.
Multi-usage (seven percent of third quarter revenues) was down Euros 2.8 million compared to third quarter 2005-2006, primarily due to the transfer to video applications of capacity previously leased to Arabsat following the expiry of the corresponding contract, and to adverse exchange rate fluctuations.
Revenues increased slightly compared to the previous quarter owing to conclusion of new government service contracts activated upon entry into service of the Eurobird-4 satellite, previously Hot Bird-3, at the 4 degrees East position.
