5th May 2016 06:48
LONDON (Alliance News) - Satellite business Inmarsat PLC on Thursday revised down its 2016 guidance for revenue after it amended its cooperation agreement in the US with Ligado Networks and reported a fall in pretax profit for the first quarter of the year.
Inmarsat reported a pretax profit of USD58.5 million in the three months to end-March, down from USD96.3 million a year before, on revenue of USD298.6 million, down from USD304.8 million.
The company said that the underlying trading environment in 2016 has continued to be tough, and demand weakened in the first quarter. Additionally, for operational reasons the ramp up in revenue from its Global Xpress satellites is "proceeding more slowly than previously expected."
Inmarsat has revised its revenue guidance, excluding revenue from Ligado, for 2016 downwards by USD50 million to USD1.18 billion to USD1.25 billion.
All of its other financial guidance remains unchanged, Inmarsat said, and it still expects to see Global Xpress revenue of USD500 million by the end of 2020.
Under the amended cooperation agreement, Ligado Networks has opted for the 30 megahertz option; under variations agreed, Ligado will pay Inmarsat USD337 million over 2016 to 2018, Inmarsat said.
The two companies have agreed to delay the timing of the transition to the 30 megahertz plan, and Ligado has provided Inmarsat with enhanced spectrum usage rights for its satellite operations for a minimum of two years, Inmarsat said.
"Many of our markets face short-term headwinds which intensified in the first quarter, leading to a softer revenue performance than expected, although we remain highly competitive in each of our core markets, growing market share and diversifying the business to plan," said Chief Executive Officer Rupert Pearce in a statement.
"Whilst in the near-term business growth will continue to be challenging in choppy markets, we remain very well positioned for future growth and diversification, and indeed I remain confident that the foundations that we are establishing will deliver the expected medium term growth," Pearce added.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright 2016 Alliance News Limited. All Rights Reserved.
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