Inmarsat reports 9.4% revenue increase in interim results

A Boeing-built Inmarsat I-5 satellite for its Ka-band GX Aviation service.
A Boeing-built Inmarsat I-5 satellite for its Ka-band GX Aviation service.

Inmarsat said its revenues were up 9.4% in the first half of 2017 and increased its dividend 5% to 21.62 cents per share, according to interim results published today.

Its group revenue for the first half was $688.2m, of which its aviation business accounted for $90.1m.

Inmarsat said aviation sustained double-digit revenue growth in its core business with further positive momentum.

Inflight connectivity (IFC), with Avianca and Qatar Airways contract wins, brought the total aircraft expected under signed contracts to 1,200, and with service with Deutsche Lufthansa Group going live with GX Aviation (GX).

The total GX revenues were $59.9m in H1 2017, including $27.8m in Q2 2017. SwiftBroadband continued to deliver income, accounting for $28.9m in Q2 2017. Classic Aero also contributed $9.7m in Q2.

Rupert Pearce, Inmarsat Chief Executive Officer, said: “Our core Aviation business (Business and General Aviation (BGA) and Safety and Operational Services SOS)) delivered further solid growth over both quarters, with both average revenue
per user (ARPU) and customer numbers rising.

“We continue to put in place the foundations for further growth, having achieved line-fit certification with all four of the leading manufacturers of business jets and installed 64 terminals for Jet ConneX, our GX product for BGA, by the end of the period.

“In IFC, we signed further contracts for GX connectivity services during the period, in particular with Qatar Airways in the Middle East and Avianca in Latin America and now have more than 1,200 aircraft expected under signed IFC contracts.

“Discussions continue with many other airlines, whose fleets’ aggregate connectivity requirements are of around 3,000 aircraft.

“The installation programme with Deutsche Lufthansa Group continues, bringing the number of installations to 101 aircraft, up from 65 at the end of the first quarter.”

Pearce added: “In the first half we successfully delivered two important satellite launches. In May, a fourth GX satellite, Inmarsat-5 F4, was launched to provide in-orbit redundancy and additional capacity for our global GX network.

The Ariane 5 lifts off from Kourou, French Guiana. Image: Arianespace.
The Ariane 5 with the EAN satellite lifts off from Kourou, French Guiana. Image: Arianespace.

“Then, in June, the Inmarsat-S EAN satellite was launched to provide one of the foundations of the European Aviation Network, which remains on track to be commercially deployed towards the end of this year.

“Following the award to Inmarsat of the Qatar Airways IFC contract, we also announced the design and build of our 5th GX satellite, which is expected to be launched during 2019, to enhance and supplement our existing global network.

“We have also continued to build out the ground infrastructure and operational capability to support both GX and our evolving businesses.

“We are investing in our organisational infrastructure, cyber capabilities and our IT systems and processes to ensure that we have the sound foundations to support our demanding growth agenda.”

In partnership with SpaceX, Inmarsat successfully launched its fourth spacecraft, Inmarsat-5 F4, to provide in-orbit redundancy for its global GX network and additional capacity to deploy into new regional growth opportunities.

Inmarsat-5 F4 will initially be positioned over Europe, the Middle East and the Indian Sub-Continent, to support customers in those regions, but is expected to have “subsequent missions thereafter”.

The build of the 5th GX satellite requires a total investment of around $200m, including launch and insurance costs, but will add “depth in capacity to service areas of higher demand”, in particular aviation routes in support of Inmarsat customers’ IFC requirements.

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