Inmarsat swings to loss, cites takeover costs

1st May 2019 07:44

(Sharecast News) - Satellite telecommunications company Inmarsat posted a 12.9% drop in first-quarter earnings on Wednesday and said it swung to a pre-tax loss, but reiterated its future guidance.In the three months to 31 March 2019, earnings before interest, tax, depreciation and amortisation fell to $152.4m from $174.9m, partly due to costs relating to the recommended offer for the group, with revenue up just 0.4% to $346.9m.Inmarsat agreed last month to a $3.4bn takeover offer from a group led by the private equity firms Apax and Warburg Pincus. The group said it swung to a pre-tax loss of $266.9m versus a profit of $56m the year before.Revenue in the maritime division declined 9.5% to $128.5m, while revenue in the enterprise and Ligado and other businesses fell 13.8% and 90.1%, respectively, to $28.2m and $3.6m. Government revenue rose 28.6% to $100.7m and aviation revenue was up 53.4% to $85.9m.Inmarsat said that in maritime, challenges remain in the mid-market but actions taken are now favourably impacting vessel loses. Meanwhile, there has been further customer take-up of key products in both its US and global government businesses.The enterprise segment saw a continued decline of products in legacy markets, while the company's aviation arm saw a material increase in in-flight connectivity revenues, driven by substantial equipment sales and continued growth in GX airtime revenues.Chief executive officer Rupert Pearce said: "Inmarsat produced a strong underlying performance during the first quarter of the year, building on the positive momentum achieved during 2018."We continue to successfully build and aggressively defend market share in our target markets, supported by our diversified product portfolio, enabling the business to capitalise on the significant growth opportunities in these markets."Inmarsat said it remains confident about its future prospects and reiterated its guidance, which includes a target of mid-single digit percentage revenue growth on average over the five year periodto 2022, with EBITDA and free cash flow generation improving steadily.