Inmarsat plc Reports Full Year Results 2009

Published March 9th, 2010 - 09:32 GMT

Inmarsat plc (LSE: ISAT), the leading provider of global mobile satellite communications services, today reported consolidated financial results for the year ended 31 December 2009.

 

Inmarsat plc – Full Year 2009 Highlights

 

·        Total revenue $1,038.1m up 4.2% (2008: $996.7m)

·        Inmarsat Global MSS revenue $682.8m up 10.4% (2008: $618.4m)

·        EBITDA $594.2m up 11.9% (2008: $531.2m)

·        Adjusted EPS[1] $0.38 up 26.7% (2008: $0.30)

·        2nd interim dividend of 20.63 cents US$, up 13.4% on 2008 final dividend

·        Full year dividend increase 10%

·        Free cash flow up 54% to $349.0m

 

Q4 2009 Inmarsat Group[2] Highlights

 

·        Q4 revenue $181.5m up 13.0% (2008: $160.6m)

·        Q4 MSS revenue $176.9m up 12.5% (2008: $157.2m)

·        Q4 EBITDA $119.7m up 18.0% (2008: $101.4m)

·        $650m refinancing completed, lowering cost of debt

·        Acquisition of <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Segovia government solutions business

 

Andrew Sukawaty, Inmarsat’s Chairman and Chief Executive Officer, said, “We finished the year strongly and continue to see good trading conditions in all our markets.  2009 was a transformational year for our satellite network, our service portfolio and our distribution arrangements, giving us a strong platform to maintain our market leadership. We are entering 2010 with a positive outlook, revenue growth momentum and new growth opportunities ahead of us.” 

 

Inmarsat Global results

 

Our Inmarsat Global business delivered growth in MSS revenue of 10.4% for the year ended 31 December 2009.  Our maritime revenue was up 7.4% and was driven by strong take up and usage of our Fleet and FleetBroadband services.  Our FleetBroadband service has gained widespread market acceptance since becoming globally available at the beginning of 2009.  We are also pleased with the progress of our new FleetBroadband 150 service which has been successful in attracting new business from smaller vessels. 

 

The land mobile sector revenue growth of 3.3% was mainly due to growth in our BGAN service.  BGAN revenue for the year increased by 33% as a result of growth in subscribers and migration from older services.  BGAN ARPU strengthened in the second half of the year and reached $288 per month in the fourth quarter.  We also saw growth in revenue from our low data rate services, showing the benefit of our collaboration with SkyWave which was completed during the year.

 

Our aeronautical and leasing sectors continued to see strong revenue growth, being up 18% and 30%, respectively, for the year.  Customer acceptance and take up of our SwiftBroadband service have been ahead of our expectations and additions of SwiftBroadband terminals began to exceed our established Swift 64 service in the second half of the year.  In-flight cellular services for airline passengers made good progress during the year, but remain at an early stage in terms of revenue contribution. 

 

Net operating costs for Inmarsat Global were down 1.9%, contributing to growth in EBITDA of 14.8% to $495.5m.

 

Stratos results

 

Our Stratos business recorded revenue growth of 1.0% for the year.  Growth of 3.8% in MSS revenue was offset by a decline in Broadband revenues.  Although Broadband revenues were lower year over year, the profitability and cash flow of this division has improved.  Operating costs at Stratos increased marginally by 0.7% for the year and Stratos ended the year with growth in EBITDA of 2.2% to $100.5m.

 

Dividend

 

The dividend announced today will be paid as a second interim dividend and will be paid in lieu of a final dividend for the 2009 financial year.  The dividend payment date will be 1 April to holders of record on 19 March 2010.  Together with the interim dividend of 12.73 US$ cents paid in October 2009, the total dividend for 2009 will be 33.36 US$ cents, an increase of 10.0% on the total 2008 dividend. 

 

Liquidity

 

The Group ended the year with a strong balance sheet and significant available liquidity.    At 31 December 2009, the Group had net borrowings of $1,319.5m, made up of cash of $226.8m and total borrowings of $1,546.3m.  Taking into consideration our cash on hand and available but undrawn borrowing facilities of $210.0m, the Group had total available liquidity of $436.8m at the end of the year.  During the fourth quarter we refinanced over $600m of debt that fell due in 2012 with new debt at lower cost and not maturing until 2017. The Group has no debt maturities in the next twelve months. 

 

Outlook

 

We believe demand from commercial and government customers is continuing to expand, particularly for our data services.  With a portfolio of broadband services now deployed globally in all our markets, we are further able to meet our customer needs and continue our revenue growth.  In addition, we are excited about entering the handheld satellite phone voice market and believe this represents an attractive new growth opportunity for the future.  In view of these factors we believe the Group can continue to deliver solid revenue growth in 2010. 

 

Allowing for approximately $10m of planned capital expenditure that has been deferred from 2009 to 2010, we expect our 2010 cash capital expenditure to be in the region of $160 to $170m, including capital expenditure for our Stratos division and deferred satellite payments.

 

Other Information

 

A webcast recording of our results presentation to be held on 9 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 Tuesday, 9 March at 2:00pm London time (United States 9:00am EST).  To access the call, please dial +44 (0)20 7162 0025 and enter the access code 858360.  A recording of the call will be available for one week after the event.  To access the recording please dial +44 (0)20 7031 4064 and enter the access code 858360.  The call will also be available by webcast accessible via the investor relations section of our website.

 

Our Financial Reports

 

Our subsidiaries Inmarsat Group Limited and Stratos Global Corporation are required by the terms of their outstanding debt securities to report consolidated financial results.  Inmarsat plc is the ultimate parent company of the Group.  A copy of the financial report for Stratos Global Corporation for the year ended 31 December 2009 can be accessed via the investor relations section of our website.  We expect Inmarsat Group Limited to report full year 2009 results on or before 30 April 2010 and a copy of these results can also be accessed via our website at that time. 

 

To assist analysts and investors in their understanding of the results announced today, the following unaudited financial tables for the fourth quarter are provided for Inmarsat Group Limited.

 

 

Inmarsat Group Limited

Revenue Breakdown (unaudited)

 

Fourth quarter ended December 31,

 

2009

2008

% Difference

Revenues

(US$ in millions)

Maritime sector:

 

 

 

voice services

25.7

26.3

(2.3%)

data services

65.5

56.6

15.7%

Total maritime sector

91.2

82.9

10.0%

Land mobile sector:

 

 

 

voice services

2.0

2.6

(23.1%)

data services

35.7

32.3

10.5%

Total land mobile sector

37.7

34.9

8.0%

Aeronautical sector

20.6

18.2

13.2%

Leasing

27.4

21.2

29.2%

Total mobile satellite communications services

176.9

157.2

12.5%

  Other income

4.6

3.4

35.3%

Total revenue

181.5

160.6

13.0%

 

Inmarsat Group Limited

Net Operating Costs (unaudited)

 

Fourth quarter ended December 31,

 

 

2009

2008

% Difference

 

(US$ in millions)

 

Employee benefit costs

32.7

23.7

38.0%

Network and satellite operations costs

13.6

11.0

23.6%

Other operating costs

20.0

31.2

(35.9%)

Work performed by the Group and capitalised

(4.5)

(6.7)

(32.8%)

Total net operating costs

61.8

59.2

4.4%


[1] Adjusted for the impact of $28.8m of non-recurring interest cost associated with refinancing activity completed during the fourth quarter 2009. 

[2] Inmarsat Group Limited results exclude the results of Stratos Global Corporation.


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