Video struggles for Eutelsat in financial year
Details
Joseph O'Halloran
| 31 July 2019

Just like its rival satellite operators, Eutelsat has revealed the challenges of the traditional video business in its 2018/2019 financial results.

For the year ended 30 June 2019, the company reported revenues of €1.321 billion with operating verticals posting €1.313 billion, down 3.1% on a like-for-like basis. EBITDA was €1.032 billion, down 4.3% year-on-year with margin of 78.4% at constant currency.

Video applications generated revenues of €864.2 million, down 2.3% on a yearly basis as an actual change and down 1.9% like-for-like. Even though the company noted that core broadcast revenues were broadly unchanged excluding the impact of the lower contribution of Fransat, its professional video line which now accounts for 8% of total video revenues, saw a double-digit decline in a context of sustained competitive pressure. Fourth quarter revenues stood at €217 million, down by 1.1% year-on-year but up 0.3% on a quarter-on-quarter basis.

At 30 June 2019, the total number of channels broadcast by Eutelsat satellites stood at 7,092 up 2.4% year-on-year, or up 3.9% excluding the disposal of the EUTELSAT 25B craft. HD penetration continued to increase, standing at 1,551 channels, an increase of 6.6% compared with a year earlier. This implied a penetration rate of 21.9% compared with 21.0% a year earlier.

The company stressed that with the exception of top-line revenues, all financial objectives set at the beginning of the year achieved or exceeded. Looking forward to the next quarter, Eutelsat noted that its EUTELSAT 7C satellite, launched in June 2019, will enter into service at the end of the 2019 calendar year, bringing incremental capacity to the video market in Africa. It added that despite the revenue falls in video, there was resilience in the core broadcast line, supported by progression in channel count and HD penetration.

Commenting on the year's financial results, Rudolphe Belmer chief executive officer of Eutelsat Communications, said: “On the operational front, the past year was notable once again for the resilience of core broadcast, supported by rising channel count and HD penetration...In the context of a challenged operating environment which continues to weigh on the revenues of our core businesses, the effective execution of our financial strategy has enabled us once again to meet or exceed all our other financial objectives with, notably, a record level of EBITDA margin ... Our efforts remain focused on maximising cash generation.”