6th Mar 2014 10:17
LONDON (Alliance News) - Inmarsat PLC Thursday raised its full-year dividend and expressed confidence for 2014, although pretax profit for 2013 dropped, hit by lower revenues and impairment charges.
Inmarst provides global mobile satellite communications services. The company posted a total dividend of 46.61 cents for 2013, up from 44.39 cents in the previous year.
Inmarsat posted a pretax profit of USD189.1 million in 2013, down from USD293.6 million in 2012, as revenues declined to USD1.26 billion from USD1.33 billion in the previous year, and it posted an impairment charge of USD185.2 million.
This included a USD27.5 million write down of Inmarsat's retail energy assets that it sold to strategic partner RigNet Inc, and a USD52.0 impairment charge relating to goodwill and other intangible assets in its Segovia business. Following annual goodwill impairment reviews another USD61.5 million of goodwill was impaired in relation to its Stratos business and USD33.5 million of goodwill was impaired in relation to the Ship Equip business.
The drop in revenue was primarily a result of the company amending its cooperation agreement with LightSquared, meaning that all payments under the agreement were suspended until April 2014. As a result, the agreement contributed only USD12.3 million to revenues , down 80% from USD60.2 million in the previous year.
Total revenue also was hit by reduced revenue from the Inmarsat solutions segment, which declined 5.5% as its broadband and other mobile satellite communications services revenue were hit by cuts in US government spending and increased competition. Inmarsat cautioned that it expects these market conditions to continue in 2014.
Both the company's Land Mobile and Aviation and Leasing segments were hit by reduced military activity in Afghanistan. In Land Mobile, strong growth in Inmarsat's voice services, driven by its Isat Phone Pro product, were offset by a decline in data revenues due to ongoing troop withdrawals in Afghanistan.
Inmarsat noted that global events, including Afghanistan, contributed USD6.7million more to revenue in 2012 than in 2013 in this segment.
In the company's Maritime segment data revenue was boosted by the take up and usage of the its FleetBroadband service, which provides wireless internet connections for ships. Inmarsat added over 7,200 FleetBroadband subscribers in 2014.
The company launched and deployed its first Inmarsat-5 satellite in December, and it expects this satellite to being commercial service in mid 2014. Its Alphasat satellite, launched in July 2013, has begun commercial services.
The company expressed confidence for 2014, particularly in its Global Xpress programme of satellite launches. It said it was on track to complete global coverage with two further satellite launches planned for the end of the year.
Inmarsat reiterated its 2014 to 2016 three-year wholesale mobile satellite communications services compound annunal revenue growth target of between 8% and 12%.
However, as 2014 will be a transitional year as the new network is rolled out and commercialised, Inmarsat said it does not expect the overall revenue growth in 2014 for Inmarsat Global, the division which includes those services, to be within this target range.
It expects overall capital expenditure in 2014 to be between USD500 million and USD525 million, due to the expenditure on its fourth Inmarsat-5 satellite.
Shares in Inmarsat were trading up 4.2% at 702.35 pence Thursday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Inmarsat