Inmarsat optimistic as mobile media momentum lifts results

6th Mar 2014 07:56

- Revenues down 2.2 per cent- EBITDA flat, EPS down 6.6 per cent- Revenue growth aim of 8-12 per cent reiteratedSatellite communications group Inmarsat dispelled concerns and held earnings steady in 2013 as growth at its mobile media satellite (MSS) arm counterbalanced weaker contribution from its services business.In a year when it launched two key satellites, including Inmarsat-5 Global Xpress (GX), the first ever global super-fast mobile broadband Ka-band service, revenues adjusted for a suspended joint venture declined 2.2% to $1.25bn and cost were controlled to ensure earnings before interest, tax, depreciation and amortisation was almost flat at $639.8m.Pre-tax profits fell 35% to $189.1m but Inmarsat wrote down assets on various deals to declare $185m of impairment losses, which, if they are taken out, allow profits to rise 8.6% to $365.3m.Chief Executive Rupert Pearce said: "We finished the year strongly with both financial and operational achievements. We saw continued momentum in our wholesale MSS business, with growth of over 5% in the fourth quarter."The MSS result outperformed the FTSE 250 group's 2012-2013 revenue target, delivering a two-year compoind annual growth rate of 2.9%. The Solutions business revenues dipped 7.5% in the fourth quarter, to record a 5.5% decline over the year to $765.5m.Inmarsat-5 is now expected to enter commercial service in mid-2014. Alphasat, launched in July 2013, is already in commercial service and has strengthened the group's offering of the robust L-band spectrum. "Our 2013 achievements mean we enter 2014 with confidence," said Pearce.Two further GX launches are planned before the end of the year and Inmarsat believes appetite remains consistent with its three-year wholesale MSS revenue growth target of between 8% and 12% CAGR up to 2016, a statement to reassure some market worries.However, 2014 will be a transitional year for the company as the GX network is rolled out and commercialised, so management does not expect total Inmarsat Global revenue growth reported for 2014 to be within this target range. Also like-for-like results for Solutions will be hit by the full-year effect of lower US Government revenues reported in 2013, but partially offset by growth in other areas. The board expects capital expenditure on a cash basis for 2014 to be between $500m and $525m. Shares in ISAT were up 4.4% to 703.75p at 08:30 on Thursday.OH