Inmarsat plc Interim Management StatementBy Inmarsat Plc, PRNE
Sunday, May 8, 2011
LONDON, May 9, 2011 - Inmarsat plc (LSE: ISAT.L), the leading provider of global
mobile satellite communications services, today provided the following
information for the three months ended 31 March 2011.
Inmarsat plc Highlights
- Total revenue $323.9m up 15% (2010: $281.5m)
- Phase 2 of LightSquared Cooperation Agreement implemented
- Acquisition of Ship Equip announced and completed
Inmarsat Group Limited - Q1 Highlights
- Inmarsat Global revenue $222.8m up 21% (2010: $183.6m)
- Total EBITDA $204.1m up 23% (2010: $165.7m)
- Profit before tax $124.8m up 51% (2010: $82.6m)
- Free Cash Flow $186.6m up 71% (2010: $109.1m)
Andrew Sukawaty, Inmarsat's Chairman and Chief Executive
Officer, said, "During the quarter we saw strong overall revenue growth
resulting from our Cooperation Agreement with LightSquared including the
first revenues from Phase 2 of the agreement. The revenue performance of our
core MSS business was in line with management expectations. New product sales
continue to be very strong, but some usage trends and other factors continue
to constrain our MSS growth. We continue to expect growth in our core MSS
revenue for 2011 to be within our 2% to 4% range."
Inmarsat plc Revenue
Three months ended 31 March Increase/ (decrease) (US$ in millions) 2011 2010 Inmarsat Global 222.8 183.6 21.4% Inmarsat Solutions 176.1 176.9 (0.5%) 398.9 360.5 10.7% Intercompany eliminations and adjustments (75.0) (79.0) Total revenue 323.9 281.5 15.1%
Three months ended Increase/ 31 March (decrease) (US$ in millions) 2011 2010 Revenues Maritime sector: Voice services 24.0 24.2 (0.8%) Data services 65.0 62.0 4.8% Total maritime sector 89.0 86.2 3.2% Land mobile sector: Voice services 1.5 2.2 (31.8%) Data services 38.9 43.0 (9.5%) Total land mobile sector 40.4 45.2 (10.6%) Aeronautical sector 23.8 22.8 4.4% Leasing 27.4 27.0 1.5% TTotal MSS revenue 180.6 181.2 (0.3%) Other income 42.2 2.4 TTotal revenue 222.8 183.6 21.4%
Activations of new FleetBroadband terminals have remained
extremely strong and a record number of 2,880 terminals were added during the
quarter. However, as FleetBroadband pricing is typically lower than older
services being replaced, the pace of migration continues to impact overall
maritime revenue growth.
Our analysis of the usage trends among FleetBroadband
customers shows that the trend of average daily data usage is increasing. If
usage continues to track this trend, usage growth will offset the pricing
impact of migration in time. In addition, we believe the recent acquisition
of Ship Equip and the introduction of FleetBroadband Plus, by Stratos, will
allow us to retain customers who might have otherwise moved to competing VSAT
services. In voice services, we have lowered certain prices to respond to
competition and retain business.
The reduction in land mobile revenue reflects lower usage
levels in the Middle East, mainly Afghanistan, which, as previously
disclosed, started to contract in the middle of 2010 and which have remained
at lower levels generally since this time. Our land mobile sector revenue saw
a contribution in the quarter from global events in North Africa and Japan.
These events resulted in increased usage primarily of our BGAN service by
government users, media organisations and aid agencies.
We are pleased with the take up and positive customer reaction
to our IsatPhone Pro service. During the first quarter we saw strong
activations and IsatPhone Pro was the primary driver of a 22% growth in
active land mobile terminals. Although the revenue contribution in the first
quarter was still modest, we are now seeing growth and our market share and
revenue targets remain unchanged.
Although Swift 64 usage levels from key government
aeronautical customers in Afghanistan remain well below the levels seen in
2010, this was more than offset by growth in SwiftBroadband and other
aeronautical services. During the quarter we saw a record number of
SwiftBroadband terminals activated and ARPU was also strong. However, we are
not seeing a recovery in Swift 64 usage and remain cautious on overall
aeronautical revenue growth for the full year.
During the quarter we added new leasing business which
resulted in a sequential improvement in our leasing revenue.
The substantial growth in Other Income was primarily driven by
revenue from our Cooperation Agreement with LightSquared. During the quarter
we recorded $16.4m and $20.1m in relation to Phase 1 and 2, respectively.
Three months ended 31 March Increase/ (decrease) (US$ in millions) 2011 2010 Inmarsat MSS 108.3 108.8 (0.5%) Broadband and Other MSS 67.8 68.1 (0.4%) Total revenue 176.1 176.9 (0.5%)
During the three months ended 31 March 2011 we adopted for
segment reporting purposes the name Inmarsat Solutions, where we previously
used the name Stratos, and we reorganised its operations to include its
former Broadband business into the same structure as its MSS operations. As a
result, the former Broadband revenue has been combined in the category
'Broadband and Other MSS' revenues.
At 31 March 2011, the Inmarsat plc group had net borrowings of
$975.3m, made up of cash and cash equivalents of $511.4m and total borrowings
of $1,486.7m. Taking into consideration our cash on hand and available but
undrawn borrowing facilities of $300.0m, the group had total available
liquidity at 31 March 2011 of $811.4m.
Our Financial Reports
Inmarsat Group Limited, our wholly-owned subsidiary, today
reported unaudited consolidated financial results for the three months ended
31 March 2011. A copy of the full financial report for Inmarsat Group Limited
can be accessed via the investor relations section of our website.
Other than disclosed in this Interim Management Statement and
the above mentioned report of Inmarsat Group Limited, there have been no
material events or transactions that have taken place in the reporting period
that would affect the results. This Interim Management Statement is required
by the UK Listing Authority's Disclosure and Transparency Rules.
Inmarsat management will discuss the first quarter results and
other financial and business information in a conference call on Monday, 9
May at 2:00pm London time, (United States, 9:00am EST). To access the call
please dial +44(0)20-7162-0025. The conference id for the call is 893535. The
call will be recorded and available for one week after the event. To access
the recording please dial +44(0)20-7031-4064 and enter the access number
893535. The call will also be available via a webcast, to access the webcast
please go to www.inmarsat.com/webcast.
Certain statements in this announcement constitute
"forward-looking statements". These forward-looking statements involve risks,
uncertainties and other factors that may cause our actual results,
performance or achievements, or industry results, to be materially different
from those projected in the forward-looking statements. These factors
include: general economic and business conditions; changes in technology;
timing or delay in signing, commencement, implementation and performance of
programmes, or the delivery of products or services under them; structural
change in the satellite industry; relationships with customers; competition;
and ability to attract personnel. You are cautioned not to rely on these
forward-looking statements, which speak only as of the date of this
announcement. We undertake no obligation to update or revise any
forward-looking statement to reflect any change in our expectations or any
change in events, conditions or circumstances.
Contact: Inmarsat, London, UK, Investor Enquiries, Simon Ailes, Tel: +44(0)20-7728-1518, simon_ailes at inmarsat.com, Media Enquiries, Chris McLaughlin, Tel: +44(0)77-9627-6033, christopher_mclaughlin at inmarsat.com
Tags: Inmarsat plc, London, May 9, United Kingdom