Inmarsat’s interim results for the first six months of the year showed double-digit growth in its aviation-based inflight connectivity revenues.
Aviation was up 38.8% with revenues of $115.5m, driven by money now coming through from its GX Aviation Ka-band inflight connectivity service. Revenues from the new service have been slow in coming but are now starting to make a difference thanks to GX customers like Qatar, Air New Zealand and Lufthansa.
Rupert Pearce, Inmarsat CEO, said further GX Aviation wins meant it now had around 3,000 aircraft in the pipeline. And as more customers go live revenues will increase.
Tony Bates, Chief Financial officer, Inmarsat, said revenue is being driven by more aircraft and higher customer take rates, but is being hit by falling prices per bit.
Jet ConneX (JX), the business aviation variant of GX, is also showing growth with 125 aircraft installed with JX in the first six months of 2018.
Inmarsat said it is also keen to drive SwiftBroadband-Safety into its target markets after its initial launch success.
Its future roadmap also includes the official commercial customer launch of the European Aviation Network (EAN) with IAG, which must now be fairly imminent.
Inmarsat’s overall group revenue increased $33.5m (4.9%) to $717.2m. In the second quarter, revenue stood at $371.8m, growing five per cent from the 2017 figure.
But overall, group adjusted after-tax profits declined 27.7 per cent to stand at $84.4m for the first six months, down from $116.7m over the same period last year.
In March 2018 Inmarsat cut its dividend and warned of more cuts in pay outs as annual earnings fell on rising costs and “lack of visibility” over a key contract, although revenue rose year-on-year.
It cut its final dividend for 2017 to 12 US cents per share, down nearly two-thirds from 33.37 cents the year prior. For the full year, Inmarsat’s dividend fell 38% to 33.62 cents from 53.96 cents in 2016.
The “lack of visibility” was over its Ligado Networks cash payments beyond the end of 2018. Inmarsat originally signed a collaboration agreement with Ligado’s predecessor firm LightSquared in 2007.
LightSquared entered bankruptcy in 2012, exiting in 2015 and becoming Ligado in 2016.
Payments from the Ligado contract will pause in 2019, Inmarsat explained. Payments will then resume in 2020 at around USD136.0 million a year, growing 3% at a compound rate over the next 99 years, according to MorningStar.co.uk.