Inmarsat, the provider of global mobile satellite communications services, today (Friday) announced its financial results for the year ended 31st December 2017.
In 2017, Group Revenue increased $71.2m (5.4%) to $1,400.2m ($1,273.5m, excluding Ligado) and in Maritime there was strong progress and a return to quarterly year-on-year revenue growth, with high bandwidth Fleet Xpress (“FX”) product gaining increasing market traction. There were over 2,600 FX vessels by year end (2016: 335 vessels).
For 2017, adjusted EBITDA3 was down $43.4m (5.5%) at $751.4m ($626.7m, excluding Ligado). Revenue growth of $71.2m was offset by further planned investment in IFC market capture and service delivery (an increase of $23.5m) and in developing networks and back office infrastructure (an increase of $41.9m), as well as changes in revenue mix ($46.7m).
Profit after tax was down $61.1m (25.1%) to $182.3m, mainly due to lower EBITDA and higher depreciation.
Inmarsat-5 F4 and Inmarsat-S EAN satellites successfully launched in H1 2017, European Aviation Network (“EAN”) progressing to commercial launch, design and build programmes for the 5th GX satellite and Inmarsat-6 F1 & F2 L-band replacement satellites on track.
Rupert Pearce, Chief Executive Officer, commented on the results:“Inmarsat delivered further operational and strategic progress in 2017, comprising both gratifying near term revenue growth as well as several important strategic proof-points around exciting medium term growth opportunities, especially in IFC.
“Our investment in Global Xpress, our high bandwidth global mobile satellite network, is starting to show material returns, generating over $140m of revenue in the year. Our strategic investment in GX will enable us to retain and develop our competitive positions in Maritime and Government and will ensure that we are well placed to access the substantial opportunity in IFC in Aviation.
“In Maritime, we made important strategic progress in securing the long term future for Fleet Xpress, with significant commitments signed with leading distribution partners. After a challenging year in 2016, which continued into Q1 2017, we delivered quarter-on-quarter growth throughout the year, and year-on-year revenue growth in the fourth quarter. In Government, we delivered on our strategy to diversify our contracted revenue base and product base, supported by another excellent operational performance during the year. In Aviation, we further established our market position in IFC, through commercial momentum and strategic investment, and our Core business delivered double digit revenue growth throughout 2017.
In Enterprise, notwithstanding current challenges, we remain optimistic about the long term future demand for M2M connectivity in the emerging global internet of things (“IoT”) market.
“Given Inmarsat’s track record, unique capabilities and differentiated market position, we are well placed to continue to grow our revenues in 2018 and beyond and to capture significant additional medium term growth opportunities available to us, particularly in in-flight connectivity.”
The Board remains confident in the medium to long term growth outlook for the business. This confidence reflects the strong long term growth anticipated in Inmarsat’s key mobile satellite communications markets, Inmarsat’s market-leading global broadband GX capabilities, its unique competitive position within each of the fast-growing Aviation markets, the resilience and agility of its established L-band business and its future growth potential, the power of the global distribution channels and full-service global mobile telecommunications offering.
“Together, these elements ensure that Inmarsat will continue to be strongly positioned for further growth over the medium to long term in our chosen markets. In Maritime, we are confident that our future growth will be founded on continued progress in penetrating the maritime VSAT market segment and on diversification of our L-band business into new market segments.”
For the Group as a whole, building on the strong positive momentum achieved in 2017, and based on recent contract wins in a number of markets, it expects further revenue growth in the short term to come mainly from material new GX revenue streams.
It also expects its L-band business to remain resilient over the medium term, given its differentiated characteristics, with future growth coming from the emergence of new market opportunities, such as IoT, services to smaller vessels and aircraft, and next generation maritime and aviation safety services.