Intelsat Posts 2Q Net Loss of US$ 529.7 Million

Luxembourg, August 1, 2019 — Satellite operator Intelsat S.A. (NYSE: I), reported total revenue of US $ 509.4 million for the three months ended June 30, 2019. But it also posted a net loss of US$ 529.7 million because of a US$ 381.6 million asset impairment charge incurred in the second quarter of 2019 for the total loss of Intelsat 29e satellite in April this year.

This translates to a quarterly loss of $1.05 per share and compares to loss of $0.38 per share a year ago. Yahoo Finance says the quarterly report represents an earnings surprise of -10.53%.

Intelsat reported an EBITDA, or earnings before net interest, gain on early extinguishment of debt, taxes and depreciation and amortization, of a loss of $52.1 million and Adjusted EBITDA of $373.8 million, or 73 percent of revenue, for the three months ended June 30, 2019. Free cash flow used in operations was $45.2 million.

Intelsat’s chief executive officer, Stephen Spengler, said in the second quarter, the company made progress on its operational priorities, including the expansion of our managed services platforms. "The global footprint of our Intelsat EpicNG-based managed services addresses aeronautical, maritime, wireless infrastructure, enterprise and government broadband requirements. Reflecting our emphasis on the wireless sector, we ramped up services on our enhanced point-to-point solutions and on our new satellites. In particular, we signed new business on the Horizons 3e high-throughput satellite, which provides infrastructure for several of the largest wireless operators in Asia, as well as Intelsat 38, which is providing new services for government applications,” he said.

Spengler concluded that Intelsat significantly increased the public details of its C-Band Alliance proposal under the U.S. Federal Communications Commission C-band proceeding.

"We added to the record a committed plan for protecting incumbent users, expanded the detail of our plan for rapid implementation, and submitted additional technical analyses supporting interference mitigation. We will continue to enhance our plan, with a goal of demonstrating that the CBA plan represents the fastest path to cleared spectrum for 5G in the U.S., while maintaining the reliability of the U.S. television and radio ecosystem.”

Second Quarter 2019 Business Highlights

Intelsat's network services revenue was $185.2 million (or 36 percent of Intelsat’s total revenue) for the three months ended June 30, 2019, a decrease of 7 percent compared to the three months ended June 30, 2018. Media revenue was $223.5 million (or 44 percent of Intelsat’s total revenue), a decrease of 5 percent compared to the three months ended June 30, 2018.

Government revenue was $93.3 million (or 18 percent of Intelsat’s total revenue) for the three months ended June 30, 2019, a decrease of 5 percent compared to the three months ended June 30, 2018.

Average Fill Rate

Intelsat’s average fill rate as of June 30, 2019 on its approximately 1,750 36 MHz station-kept wide-beam transponders was 78 percent, compared to its average fill rate at March 31, 2019 of 78 percent with no change in transponder count. In addition, as of June 30, 2019, Intelslat's fleet included approximately 1,200 36 MHz units of high-throughput Intelsat EpicNG capacity, compared to 1,475 units in March 31, 2019, reflecting the April 2019 failure of the Intelsat 29e satellite.

The company said that as of June 30, 2019, Intelsat’s contracted backlog, representing expected future revenue under existing contracts with customers, was $7.5 billion after adjusting for known reductions to backlog related to the Intelsat 29e satellite failure, as compared to $7.9 billion in March 31, 2019.