1st Aug 2019 11:11
(Alliance News) - Satellite communications firm Inmarsat PLC said Thursday it will not declare an interim dividend following its proposed takeover deal, amid a narrowed loss and slight revenue growth.
For the six months to the end of June, Inmarsat posted a pretax loss of USD116.6 million, narrowed from USD119.1 million the year before.
Earnings before interest, taxes, depreciation and amortisation rose by 3.1% to USD384.6 million from USD373.0 million the prior year.
The narrowed loss was due to revenue growth, as well as a slight reduction in net financing costs to USD255.6 million from USD259.8 million. The decline in net financing costs was driven by changes in the unrealised conversion liability on the 2023 convertible bond.
Revenue meanwhile, increased by 2.2% to USD733.3 million from USD717.2 million, driven mainly by revenue from the Aviation division growing by 33% to USD154.1 million and the Government segment by 15% to USD211.0 million.
Inmarsat did not declare an interim dividend, compared to 8 cents per share the prior year, following its GBP3.4 billion takeover offer by a consortium including private equity firm Apax Partners LLP and Warburg Pincus International LLC.
Other parties include Ontario Teachers' Pension Plan Board, and the Canada Pension Plan Investment Board.
Although Inmarsat agreed to the takeover in March, and its shareholders approved the deal in May, the UK Competition & Markets Authority in July said it would be looking into whether the proposed deal would create competition concerns.
Also, the UK Secretary of State for Culture, Media & Sport issued a public interest intervention order later on in July, to review the deal on the grounds of national security.
Looking ahead, Inmarsat is targeting mid-single digit percentage revenue growth over a five year period from 2018 to 2022, with Ebitda expected to improve steadily.
For 2019 alone, revenue, excluding Ligado Networks, is guided to be in the range of USD1.30 billion to USD1.40 billion.
"Inmarsat produced a robust performance in the first half of the year, supported by continued traction with Global Xpress, as we continue to focus on building and defending market share in our target markets," said Chief Executive Officer Rupert Pearce.
Shares in Inmarsat were up 1.0% at 578.20 pence on Thursday.
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