SES numbers looking good
Chris Forrester

Satellite operator SES unveils its latest numbers on Friday (October 23). The market expects positive news.

Morgan Stanley has come out with an investor note saying that SES (and Eutelsat) are the bank’s top defensive stocks in media, given that “they stand out with excellent valuations and accelerating growth profiles when visibility is at a premium. We expect the next updates to highlight key attractions - SES 3Q09 on Friday, Eutelsat 1Q10 on 5th November,” says Morgan Stanley.

Investment analysts at Petercam have reiterated their ‘Add’ advice to investors. They say that SES has announced “several important contract wins during the quarter for a total of no less than 8 transponders underscoring the resilience of its business model amid current protracted downturn.”

“We bank on supportive Q3 numbers with a projected acceleration of the yoy recurring growth rate to 3.4% (from 1% in Q2). Reported EBITDA is expected to rise 6.1% yoy,” says senior analyst Matthias de Wit.

“During the quarter the German public broadcasters confirmed their intention to delay the analogue switch-off and set Q1 2012 as their final target date (versus end 2010 previously). The pubcasters moreover announced that all switched-off analogue channels will move to HDTV, allowing for an immediate refill of a third of the reverted capacity. The one year delay and more rapid refill than initially expected will allow SES for a much smoother transition to digital. Note that the final impact, once all reverted capacity will have been remarketed, will not exceed €40m (i.e. 2.1% of 2011 revenues). This reflects a €2m price cut on around 20 transponders which will be remarketed outside of Germany.”
“Though US dollar weaknesses will have a top line and EBITDA impact, the cash flow effect is neutral given the 100% natural hedge through USD denominated capex and financial debt,” adds Petercam.