Intelsat Reports Increase in Revenue but Posts Loss in 2Q 2013
Washington, D.C., August 1, 2013 — Intelsat S.A. reported a slight rise in revenue to US$ 653.8 million but posted a net loss of US$ 408.3 million, or US$ 4.19 per share, for the three months ended June 30, 2013. The loss, however, included US$ 366.8 million for pre-tax charges related to early extinguishment of debt resulting from debt paydowns resulting from the company’s April 2013 initial public offering and debt refinancing activity in the second quarter.
The company also reported EBITDA, or earnings before net interest, taxes and depreciation and amortization, of US$ 439.2 million, and Adjusted EBITDA of US$ 509.4 million, or 78 percent of revenue, for the three months ended June 30, 2013.
Total revenue for the latest-quarter increased by US$ 15.1 million, or two percent, to US$ 653.8 million, as compared to last year.
Intelsat CEO Dave McGlade assured investors that with the completion of its April IPO and successful debt refinancing initiatives in the first half of 2013, the company is driving a positive cycle of delivering its balance sheet.
Lower interest costs and reduced capital expenditures will enable increased cash flow, which in turn should allow us to further reduce debt, he explained.
“The Intelsat team is executing against our operational priorities for 2013. New business on video neighborhood satellites and on our broadband mobility infrastructure is driving on-network revenue growth in our network services and media businesses. Declines in our government business, due to the U.S. government budget sequestration and troop drawdowns, were reflected primarily in off-network revenues. Overall, revenue and Adjusted EBITDA grew at two percent and four percent, respectively, as compared to the second quarter of 2012,” McGlade added.
Analysts expected the company to report a loss of US$ 2.67 per share and revenues of US$ 651.66 million for the quarter, failing to include the $366.8 million pre-tax charges.
Consistent with prior guidance, Intelsat said it expects its capital expenditures to range from US$ 600 million to US$ 675 million in 2013, and US$ 575 million to US$ 650 million in 2014. For 2015, the company anticipates capital expenditures of US$ 775 million to US$ 850 million.
Analyst Raymond James & Associates said it believes Intelsat can trade at a premium to its peers based on accelerating growth, steady deleveraging, and the prospect for improving capital efficiency.
Intelsat’s network services business, which provides broadband infrastructure for fixed and wireless telecommunications and enterprise and mobility applications, accounted for 46 percent of total second quarter 2013 revenue, and at $303.7 million was up four percent as compared to the second quarter 2012.
In the second quarter 2013, growth in transponder and managed services revenue for wireless telecommunications, mobility and enterprise applications was offset by reduced revenue from channel services, which has been declining due to migration to fiber.
Intelsat’s media business, which provides satellite capacity for the transmission of entertainment, news, sports and educational programming for approximately 300 broadcasters, content providers and direct-to-home platform operators worldwide, accounted for 34 percent of our revenue for the quarter ended June 30, 2013.
Second quarter revenue of $220.5 million increased 4 percent as compared to the second quarter of 2012, as service volume increased for DTH and cable and broadcast program distribution applications.
Intelsat’s government business, which provides highly customized, secure commercial satellite-based solutions to civilian agencies and the U.S. military defense sector, accounted for 19 percent of our revenue for the quarter ended June 30, 2013.
Second quarter revenue of US$ 122.4 million decreased 2 percent as compared to second quarter 2012 results, as declines in lower-margin off-network revenue more than offset increases in on-network transponder services revenue from the second quarter 2012 entry into service of a payload hosted for the Australia Defence Force and increased sales of managed services in support of aeronautical applications in Asia.
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