‘Challenged’ international video distribution puts brake on SES Q3
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Editor
| 26 October 2018

Satellite operator SES has revealed steady overall third quarter results which reveal the disparity in growth in its two key business segments, networks and video, with the former continuing to outshine the latter.

For the quarter ended 30 September 2018, the company reported overall revenue of €1.469.4 billion, inching 0.4% year-on-year at constant currency exchange rate but down 3.8% on a reported basis. For the quarter underlying revenue €1.445.6 million; up 2.1%. Looking at the two business divisions, underlying year to date revenue at SES Video was €967.5 million, 2.8% lower at constant FX and down 5.6 on a reported annual basis compared with a 13.6% rise at SES Networks.

The revenues were the driver of overall net profit of €303.7 million, an annual fall of almost €91 million compared with the end of the third quarter of 2017.

Drilling down into the results, SES Video accounted for 67% of group revenue, slipping by a single percentage point compared with the same period in 2017. The division saw growth in video services partly offset lower video distribution revenue. Q3 2018 underlying revenue of €317.5 million was 3.8% lower year-on-year at constant FX. Video Distribution underlying revenue for the first nine months of 2018 was 4.7% lower than year-to-date 2017.

Yet during the quarter, SES Video secured what it called ‘important’ renewals across core neighbourhoods including Channel 4 and QVC, while also securing agreements with customers to expand TV channel offerings in Latin America (Kiwisat) and Nigeria (Africa.XP). Video services division MX1 is now partnering with Smart Mobile Labs to enhance the experience for spectators of live events, while also continuing to build market traction for the MX1 360 solution.

The company also revealed that its video division now has 97% of expected 2018 group revenue contractually committed and says that the business remains on track to deliver 2018 group revenue within the top half of the outlook range, that is €1.990–2.035 billion. It believes that SES Video will likely be at the lower end of expectations, and SES Networks at the higher end of the range. It expects EBITDA of over €1.270 billion.

Commenting on the results, SES president and CEO Steve Collar, expressed overall satisfaction with results but accepted the issues at the video business. He said “Our focus on execution continues to generate strong financial performance, delivering growth in absolute and underlying revenue, and we remain on track to deliver on our year-end financial outlook... Video Services contributed positively in Q3 with growing traction for our MX1 360 platform. International video distribution remains challenged with some platforms struggling to achieve market traction and strong competition for all new platforms. We remain focused on growth opportunities while reinforcing our core neighbourhoods that are among the best and most penetrated DTH neighbourhoods in the world.”