14th Feb 2025 10:37
(Alliance News) - Eutelsat Communications SA saw its shares plunge on Friday after reporting a deepening loss for the first half of its financial year.
The Paris-based satellite operator said net loss widened to EUR873.2 million for the six months to December 31, widening from a EUR191.3 million loss a year earlier.
Shares in Eutelsat plummeted 65% to EUR1.51 each in London on Friday morning.
The steep decline was driven by a EUR535 million goodwill impairment on its geostationary satellite assets, reflecting lower expected future cash flows amid rising competition and a shift in demand to low Earth orbit connectivity services.
The company also booked EUR117 million in satellite impairments and saw depreciation costs surge to EUR433.7 million from EUR316.1 million.
Revenue for the six months to December 31 rose 5.9% to EUR606.2 million, with growth in connectivity services offsetting a continued decline in video broadcasting revenue.
Adjusted earnings before interest, tax, depreciation, and amortisation fell 8.4% to EUR334.9 million, with the Ebitda margin dropping to 55.2% from 63.8%.
Despite the mounting losses, Eutelsat said the first-half performance was in line with its expectations.
It also reaffirmed its full-year targets and announced a EUR200 million reduction in its capital expenditure forecast, now expected between EUR500 million and EUR600 million.
CEO Eva Berneke said: "The past few months have seen the alignment of several factors paving the way for Eutelsat's LEO build-out strategy: first, the exercise of the put option for the sale-and-lease-back of our passive ground infrastructure, with proceeds due H1 calendar 2026 and second, confirmation of the European Union's IRIS2 multi-orbit constellation representing a key step in Eutelsat's LEO strategy, which in turn defines the road map for the interim LEO constellation extension.
"We are actively working on a financing plan in line with our strategic road map and longer term leverage objective."
Looking ahead, Eutelsat warned of "more challenging conditions" for GEO-enabled broadband in Europe, but said it remains committed to integrating its OneWeb LEO network to strengthen its position in satellite connectivity.
By Eva Castanedo, Alliance News reporter
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