Revenues, EBITDA fall below expectation in 2017 for SES
| 23 February 2018

SES has become the latest major satellite operator whose full year and fourth quarter results for 2017 have shown what a tough year the industry faced.

For the full year ended 31 December 2107, the Luxembourg-based company reported overall revenue of €2.035 billion, down 1.6% on an annual basis, 5.2% like-for-like. EBITDA margin was 65.1%, down 5.2 percentage points compared with 2016 as reported and 66.7% like-for-like. Net profit was €596.1 million around two-thirds of that posted in 2016 which though included a €495.2 million gain related to the company’s consolidation of the O3b business.

Looking at business lines, SES Video posted revenue of €1.383 million in FY 2017, down 3.6% on a like-for-like basis and included Q4 2017 revenue of €351.5 million, itself tumbling 3.0% like-for-like. Examining the performance, SES said that while video remains a competitive market environment, the business also had an unusually high impact from satellite health and launch delays, as well as some specific short-term factors at its MX1 services division relating to the non-renewal of a number of specific legacy contracts.

The company assured that in 2018, the implementation of IFRS 15 is expected to lead to a revenue reduction of around €15-20 million related to its German HD media platform HD+ with no cash impact. It also noted that SES Video was delivering more channels to more viewers from more premium neighbourhoods than any other operator and, with a backlog of €5.3 billion, its video business was large, profitable and resilient.

The results come only days after SES announced that it was changing its top level management team with current president and CEO Karim Michel Sabbagh stepping down on 5 April.

Commenting on his last set of annual results, Sabbagh said he was disappointed with the year and that as a result, dividends would be trimmed. He said: “2017 has been an important year of transformation for SES. Business performance was below our expectations as the market remained challenging throughout 2017, compounded by some fleet health issues ... [but SES is] now well positioned to deliver growth in the future. We are starting to see the benefits of our investment programme with three new satellites successfully launched in 2017 and another two already launched in 2018. As we continue to adapt to the new operating and financial model, and invest in our future growth, we have decided to rebase our dividend, allowing for growth in future years as our business develops.”