6th Nov 2014 08:28
LONDON (Alliance News) - Inmarsat PLC Thursday posted a rise in pretax profit for the third quarter, and said it expects to see continuing weakness from its Government sector in the remainder of 2014, with underlying growth in its other three businesses.
The satellite operator also said operating costs are now anticipated to be slightly lower than previously expected for the full year. Capital expenditure for 2014 is expected to be around USD450 million, and between UDS450 million to USD500 million for 2015 as it expects to launch its two remaining Inmarsat-5 satellites in early 2015.
Inmarsat said its longer-term expectations remain unchanged, and it continues to expect Global MSS revenues to fall within the 8% to 12% compound annual growth rate range for 2014 to 2016, and annual GX revenues of USD500 million by the fifth anniversary of the launch of global GX services.
The satellite communications services company posted a pretax profit of USD104.1 million for the three months to end-September, up from USD23.5 million a year before, although revenue dropped slightly to USD300.6 million from USD306.9 million.
Operating costs reduced by USD3.6 million due to the sale of retail energy assets, headcount reduction in its Government business in 2013, partly offsetting higher costs due to an acquisition in its Maritime business.
For the first nine months of the year, Inmarsat posted a pretax profit of USD272.4 million, up from USD209.0 million, as revenue rose to USD952.9 million from USD947.2 million, also driven by lower impairment charges.
The company said that commercial market demand for global connectivity had continued to grow, with passenger demand for in-flight connectivity helping to drive activity in the aviation market. However, demand from its traditional government customers continues to decline, due to budget constraints and lower operation requirements.
Legacy contracts continued to be terminated or scaled back, Inmarsat said, and competition is intense. Despite this, the company expressed optimism for opportunities from new customers in developing countries, and new demand for connectivity and value-added services from traditional customers, giving it a more positive longer-term outlook for the government markets.
Shares in Inmarsat are trading down 0.9% at 683.50 pence Thursday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Inmarsat