Inmarsat revenues up but shares slip in challenging market

Inmarsat, the mobile satellite communications services provider, has reported a 5% increase in third quarter revenues to $16.4m.

Most notably, aviation revenues were up 50% with growth in both core business and IFC installation activity. Air Asia's selection of GX confirmed in Q3, brought aircraft expected under signed IFC contracts to 1,300.

Maritime revenues remained unchanged year-on-year but increased sequentially reflecting 26% increase in VSAT revenues but lower FleetBroadband  and legacy product revenues

Government: Revenues grew 4%, mainly reflecting stronger US results. Enterprise revenues returned to growth, driven by higher airtime usage and terminal sales following recent hurricanes.

Higher costs

However, EBITDA was lower at 6.5%, or $13.3m. The company pointed out that the favourable impact of higher revenues was more than offset by changes in revenue mix, particularly in aviation, by further investment in IFC market capture and delivery, and by higher central operational delivery costs

Rupert Pearce, Chief Executive Officer, commented on the results: "Inmarsat made further progress in the third quarter, with revenues again ahead of last year.”

He added: “We have continued to invest in this significant opportunity, and in our core operational capabilities, albeit at the expense of lower EBITDA margins, to ensure that we remain uniquely positioned as the leading operator in global mobility markets.

“Consequently, whilst our markets remain challenging and the outlook continues to be difficult to predict, I remain confident about the medium to long term prospects for Inmarsat."  

Clearly the City agrees that the market is challenging, Inmarsat was down almost 8% in late-morning trading to 515p.