Inmarsat 3Q Results
Inmarsat Holdings Limited, a wholly-owned subsidiary of Inmarsat plc (LSE: ISAT), provider of global mobile satellite communications services, reported unaudited consolidated financial results for the 3 months ended 30 September 2008.
Q3 2008 Highlights
• Revenue up 16.4% to $162.5m (2007: $139.6m)
• EBITDA up 15.4% to $112.3m (2007: $97.3m)
• Profit after tax up 58.6% to $37.6m (2007: $23.7m)
• Strong growth across all business sectors
• BGAN revenue $20.9m up 6.6% sequentially on Q2 2008
• Successful launch and deployment of third Inmarsat-4 satellite
Andrew Sukawaty, Inmarsat's Chairman and Chief Executive Officer said, "Our business continues to generate strong revenue and cash flow growth across all of our market sectors. We have seen no impact of global economic weakness in the usage and take up of our services and we are firmly on track to deliver revenue growth for the full year well ahead of the top of our target range. With the successful launch of our third Inmarsat-4 satellite, which provides global coverage for our broadband platform, we are ideally positioned to meet the expanding needs of our customers and capture further growth."
Mobile Satellite Services
During the third quarter Inmarsat’s maritime sector revenue saw growth of 6.7% across voice and data services. Total maritime active terminals grew by 4.1%, while demand for Inmarsat’s Fleet and new FleetBroadband services remained strong with 35.9% growth in active terminals. During the quarter, we announced that we had reached Inmarsat’s first 1,000 active FleetBroadband terminals and confirmed that A.P. Moller Maersk had contracted with Inmarsat’s service provider Marlink, to begin a retrofit of its fleet with FleetBroadband. We believe FleetBroadband is gaining industry acceptance and that take up will be further enhanced by the global coverage added by the third Inmarsat-4 satellite.
“On 23 September 2008, we announced the expansion of the FleetBroadband family to offer an entry-level, globally deployable, combined voice and data service to target and expand the addressable market of small vessels. The new service, FleetBroadband 150, will deliver voice, IP data up to 150kbps and SMS, and is planned to be available by mid-2009.
Third quarter land mobile sector revenue was up 17.3% with growth in land data of 21.9%. Active land terminals grew by 2.2%, including 4,295 new BGAN subscribers added during the third quarter. Growth in land data was mainly due to strong take up and usage of BGAN services as well as from increased BGAN demand resulting from world events.
Inmarsat’s third quarter aeronautical sector revenue grew by 54.3%. Aeronautical growth continues to be driven by strong usage and take up of Inmarsat’s Swift 64 service from government and business jet customers. We continue to add Swift 64 terminals at a consistent rate and we are seeing an acceleration in the early take up of Inmarsat’s SwiftBroadband service. Airline trials of in-flight passenger connectivity services are continuing, although it remains too early for there to be any material contribution to revenue growth.
Inmarsat’s third quarter leasing revenue was up 21.9% year over year, reflecting the ongoing benefit of new leases signed early in the year together with a high level of lease renewals.
At 30 September 2008, Inmarsat Holdings Limited had net borrowings of $960.9m, incorporating borrowings of $1,003.7m and cash of $42.8m. Inmarsat Holdings also had a revolving credit facility with an amount available but undrawn at the end of the quarter of $200.0m. Net borrowings reported by Inmarsat Holdings Limited exclude the net borrowings of Inmarsat plc and CIP UK Holdings Limited and its subsidiaries, including Stratos Global Corporation.
Volvo Ocean Race
On the 11 October 2008, crews on board eight yachts set off to compete in the round-the-world yacht race and viewers around the globe will be able to follow the spectacle over more than 37,000 nautical miles thanks to Inmarsat’s FleetBroadband service. Inmarsat and its partners, Stratos Global Corporation and Thrane & Thrane, are sponsoring the world-famous event, providing equipment and high-speed connectivity for all the yachting teams competing in this year's race. FleetBroadband will take media coverage of the race to a new level, supporting HDTV broadcasts and enabling live video and radio interviews, as well as rapid delivery of photos, emails and blogs.
Inmarsat Holdings Limited, through its subsidiary Inmarsat Finance II plc, is the issuer of $450.0m of 10.375% Senior Discount Notes due 2012. Inmarsat Group Limited, through its subsidiary Inmarsat Finance plc, is the issuer of $310.4m of 7.625% Senior Notes due 2012. Both Inmarsat Holdings Limited and Inmarsat Group Limited are required by the terms of the notes outstanding to report quarterly financial results. Inmarsat plc is the ultimate parent company of the Inmarsat group.