7th Nov 2013 09:46
LONDON (Alliance News) - Shares in Inmarsat PLC dropped 6.1% Thursday morning after it posted declining revenues in the third quarter ended September 30.
Inmarsat said that several of its businesses were impacted by reduced military activity in Afghanistan, and that the launch of its Global Xpress satellite was delayed.
Inmarsat was trading down 43.50 pence at 670.50p Thursday, making it the biggest faller on the FTSE 250.
The mobile satellite communications company posted total revenues of USD306.9 million, down from USD325.9 million in the previous year.
Although the company said that it was on target to achieve its objectives for the full year, the delay of the launch of its first Global Xpress satellite, designed to provide superfast broadband services, would cause revenues to be delayed. The company said in a statement that the launch of the satellite was now "a matter of weeks away."
The company cautioned that in 2014, operating cost investments in the military radio spectrum band, L-Band, will coincide with a difficult outlook for its US government business.
These factors will combine to apply downward pressure on operating profits during 2014, Inmarsat said, but it remains confident in its outlook for 8% to 12% growth in mobile satellite communications revenue.
Reduced activity in Afghanistan hampered several of the company's divisions. In Land Mobile, strong growth in voice services offset a decline in data revenues as Western troops were withdrawn from Afghanistan. Military operations in Afghanistan contributed around USD1.6 million more revenue in 2012 than in 2013, Inmarsat said.
In Aviation and Leasing, growth from the company's wi-fi service for aircraft, SwiftBroadband, offset decline in its Swift 64 service revenues. Swift 64 is a voice services package for aircraft. It saw declines due to lower usage by government customers, partly related to the reduced activity in Afghanistan.
In the company's Inmarsat Solutions division, revenues declined 9.5% to USD94.2 million from USD104.1 million in the previous year ,as aviation and broadband global area network revenues declined due to the lower activity in Afghanistan.
In the company's Maritime division, data revenues were driven by the uptake of its maritime broadband network service, FleetBroadband. However, revenue growth was constrained as it continued to migrate customers to newer services.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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