Inmarsat plc Reports Preliminary Full Year Results 2010By Inmarsat Plc, PRNE
Sunday, March 6, 2011
LONDON, March 7, 2011 - Inmarsat plc (LSE: ISAT.L), the leading provider of global
mobile satellite communications services, today reported preliminary
consolidated financial results for the year ended 31 December 2010.
Inmarsat plc - Full Year 2010 Highlights - Total revenue $1,171.6m up 12.9% (2009: $1,038.1m) - Inmarsat Global MSS revenue $727.0m up 6.5% (2009: $682.8m) - EBITDA $696.1m up 17.1% (2009: $594.2m) - Profit before tax $333.5m up 69.4% (2009: $196.9m) - Final dividend of 22.69 cents (US$) up 10% - Global Xpress investment programme launched and on track - LightSquared agreement triggers new revenues Inmarsat Group Limited - Q4 2010 Highlights - Total revenue $292.1m up 8.4% (2009: $269.4m) - EBITDA $171.8m up 18.2% (2009: $145.3m)
Andrew Sukawaty, Inmarsat's Chairman and Chief Executive
Officer, said, "We delivered a strong performance in 2010 with total revenues
up 12.9% driven by growth of 6.5% in core MSS revenues and by a second half
contribution from our Cooperation Agreement with LightSquared. While a
slowdown in growth in the last quarter of 2010 and early 2011 has resulted
from lower usage levels for some of our products, continued growth in new
terminal activations and positive market reaction to our new services mean
that we remain confident in future MSS growth prospects and in our 5-year
growth target. In addition, in 2011 we will recognise substantial revenue in
connection with our Cooperation Agreement with LightSquared."
Inmarsat plc Revenue Increase % (US$ in millions) 2010 2009 Inmarsat Global 764.1 694.8 10.0% Stratos 716.8 644.1 11.3% 1,480.9 1,338.9 10.6% Intercompany eliminations and adjustments (309.3) (300.8) Total revenue 1,171.6 1,038.1 12.9% Inmarsat Global Revenue Increase/ (decrease) % (US$ in millions) 2010 2009 Maritime sector Voice services 98.1 104.7 (6.3%) Data services 262.5 252.3 4.0% Total maritime sector 360.6 357.0 1.0% Land mobile sector Voice services 7.3 8.5 (14.1%) Data services 146.4 138.0 6.1% Total land mobile sector 153.7 146.5 4.9% Aeronautical sector 101.0 75.8 33.2% Leasing 111.7 103.5 7.9% Total mobile satellite communications services 727.0 682.8 6.5% Other income 37.1 12.0 209.2% Total revenue 764.1 694.8 10.0%
Although demand for FleetBroadband terminals remained strong
throughout the year with over 10,000 terminals added, maritime revenue growth
underperformed our expectations. As FleetBroadband pricing is typically lower
than older services being replaced, the pace of migration has impacted
revenue growth. Over time we expect to offset this effect as usage grows in
response to the increased service capability. In addition to the impact of
challenging economic conditions in the shipping industry, we are also seeing
contraction in demand for voice services due to email substitution and
greater competition from other providers. Although a lesser factor,
competition from VSAT service offerings has also increased since the
announcement of our Global Xpress service.
We are introducing pricing packages with our FleetBroadband
service that have already proved successful with AP Moller-Maersk, the
world's largest ship operator. We believe these packages will continue to
gain customer traction and help retain FleetBroadband's market leading
position. In addition, increasing market awareness of our planned Ka-band
services is incentivising customers to remain with our existing services
until our Global Xpress service enters the market.
Growth in our land mobile sector revenue was driven by demand
for our BGAN service, which during the first half saw a positive contribution
from global events offset by lower usage levels from Afghanistan and Iraq.
During the second half of 2010 we continued to add new BGAN subscribers and
maintained a steady monthly ARPU. Although our handheld satellite phone
service, IsatPhone Pro, was launched in June and has been well received by
the market, the early stage of this service meant that the contribution to
revenue was not material in the year. In addition we continue to advance our
presence in the satellite low data rate market where we expect to benefit
from new products in 2011.
Strong aeronautical revenue growth was driven by particularly
high usage of our Swift 64 service by government customers for much of the
year, before usage levels normalised during the fourth quarter. However,
SwiftBroadband additions remained strong throughout the year and, in response
to this demand, we added a lower cost variant called SwiftBroadband 200 in
Although we saw strong leasing business growth for the year as
a whole, the anticipated end of a significant aeronautical lease and a
reduction in a maritime lease during the fourth quarter resulted in lower
total lease inventory at the end of the year.
Stratos Revenue Increase/ (decrease) % (US$ in millions) 2010 2009 MSS revenue Inmarsat MSS 433.7 427.1 1.5% Other MSS 123.7 125.9 (1.7%) Total MSS revenue 557.4 553.0 0.8% Broadband (including Segovia) 159.4 91.1 75.0% Total revenue 716.8 644.1 11.3%
In January 2010 we completed the acquisition of Segovia, a
provider of managed communications solutions principally to US government
agencies, and report revenue from this business within our Stratos segment.
Revenue growth in our Stratos Broadband business predominately resulted from
the newly recognised Segovia revenue.
In our Inmarsat Global maritime business, we expect the
ongoing strong growth of FleetBroadband to continue to constrain our revenue
growth given the lower price of data services as usage levels build. In
addition, we expect maritime voice revenue to continue to be impacted by
email substitution and increased competition.
While land mobile revenues will remain susceptible to volatility, both
BGAN and IsatPhone Pro are attracting new users and traffic to our network
which will drive growth. Overall growth in the early part of 2011 will be
impacted by comparability due to non-recurring event revenues in the early
part of 2010.
In our aeronautical business, we expect increasing demand for
SwiftBroadband from existing and new users to drive incremental revenues.
However, the high government customer usage levels seen in 2010 have
normalised and we expect our aeronautical growth in 2011 overall to be
affected by the continuation of a lower level of activity and by budget
Our pipeline for new leasing business is encouraging and therefore we
expect to rebuild our total leasing inventory during the year.
Overall we expect growth in our core MSS revenues for 2011 to
be between 2% and 4%, with growth weighted to the second half of the year due
to comparability affected by the high level of event revenue seen in early
2010. In addition we expect to recognise between $187m and $207m of revenue
in connection with our Cooperation Agreement with LightSquared.
We expect some limited incremental operating costs in relation to our
Global Xpress programme and up to $20m of operating costs in relation to
Phase 1 of our Cooperation Agreement with LightSquared.
Our Alphasat and Global Xpress investment plans remain on track as to
schedule and total capital costs. We expect that cash used for capital
expenditure in 2011 will be between $450-550m.
We see no change in our dividend growth commitments and
therefore expect dividend growth of at least 10% for 2011 compared to 2010.
At 31 December 2010, the Inmarsat plc group had net borrowings
of $1,139.2m, made up of cash and cash equivalents of $343.8m and total
borrowings of $1,483.0m. Taking into consideration our cash on hand and
available but undrawn borrowing facilities of $300.0m, the group had total
available liquidity at 31 December 2010 of $643.8m.
Our Financial Reports
While Inmarsat plc is the ultimate parent company of our
group, our subsidiary Inmarsat Group Limited is required by the terms of
certain of our debt securities to report consolidated financial results. We
expect that a copy of the full year 2010 results for Inmarsat Group Limited
will be posted to our website on or before 30 April 2011.
To assist analysts and investors in their understanding of the
results announced today, the following unaudited tables for Inmarsat Group
Limited for the fourth quarter are provided below.
Inmarsat Group Limited Fourth quarter ended Revenue Breakdown (unaudited) December 31, 2010 2009 % Difference Revenues (US$ in millions) Maritime sector: voice services 24.7 25.7 (3.9%) data services 66.6 65.5 1.7% Total maritime sector 91.3 91.2 0.1% Land mobile sector: voice services 1.9 2.0 (5.0%) data services 36.0 35.7 0.8% Total land mobile sector 37.9 37.7 0.5% Aeronautical sector 24.2 20.6 17.5% Leasing 25.6 27.4 (6.6%) Total MSS revenue 179.0 176.9 1.2% Other income 16.1 4.6 250.0% Total revenue 195.1 181.5 7.5% Stratos Revenue Breakdown (unaudited) Fourth quarter ended December 31, 2010 2009 % Difference MSS Revenue (US$ in millions) Inmarsat MSS 105.6 110.0 (4.0%) Other MSS 29.3 34.6 (15.3%) Total MSS revenue 134.9 144.6 (6.7%) Broadband 40.1 22.2 80.6% Total Stratos revenues 175.0 166.8 4.9%
A webcast recording of our results presentation to be held on
7 March at 9:30am will be posted to our website after the event. To access
the webcast please go to the investor relations section of our website at
www.inmarsat.com. Inmarsat management will also host a conference call on
Monday, 7 March at 2:00pm London time (United States 9:00am EST). To access
the call please dial +44(0)20-7031-0088 and quote conference id 887406. A
replay of the call will be available for one week after the event. To access
the replay please dial +44(0)20-7031-4064 and enter access code 887406. The
call will also be available by webcast accessible via the investor relations
section of our website.
Certain statements in this announcement constitute
"forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. 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: +44-20-7728-1518, simon_ailes at inmarsat.com; Media Enquiries, Chris McLaughlin, Tel: +44(0)779-627-6033, chris_mclaughlin at inmarsat.com
Tags: Inmarsat plc, London, March 7, United Kingdom