SES Foresees Increased Cash Flow from C-band Spectrum

Satellite operator SES is expecting a significant cash inflow of approximately $3 billion from the FCC’s C-band compensation scheme. This compensation is related to the reallocation of C-band spectrum for 5G deployment, and SES anticipates receiving the funds by early to mid-Q4/2023.

Moreover, there are indications of further cash inflows beyond this initial amount.

In their recent half-year results announcement, SES reported a notable 10% increase in overall revenues.

This positive performance, coupled with the prospects of additional revenue from various sources, including cost reimbursements for refitting equipment for their North American clients, contributed to a sharp increase in the company’s share price, which rose by over 15% on August 3rd, reaching €6.68.

However, amid the positive financial news, there were concerns regarding the mPOWER satellites, as there were reports of sporadic malfunctions in some of the electronic components on board. Despite these technical issues, SES management expressed confidence in quickly resolving the problems and downplayed any potential long-term impact on their operations.

Nevertheless, the mPOWER fleet’s launch has faced delays, and analysts suggested that the tech issues might be related to these postponements.

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Analysts Applaud SES’s Robust H1 Results and Share Buyback Program

 

Despite the uncertainties surrounding mPOWER, SES’s maritime revenues demonstrated strong growth, increasing by an impressive 30%, indicating the company’s ability to perform well in a competitive market, even amidst challenges.

Analysts praised SES’s robust H1 results and confirmed that the company is on track with its full-year guidance. Additionally, management announced a surprise share buyback program, which typically signals the company’s confidence in its financial position and future prospects. The announcement of potential further cash returns also bolstered investor confidence.

However, given the lingering uncertainties regarding the commercial success of mPOWER and its associated satellite launches, analysts cautioned that SES’s shares could remain volatile.

Despite this, the overall outlook for the company remains positive, and the analysts reaffirmed their Outperform rating, expressing optimism about SES’s performance in the future.

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Source: Advance Television