SpeedCast Achieves 143% Revenue Growth for 1st Half 2017
London,UK, Aug 29, 2017- Speedcast International Limited (ASX:SDA), a provider of fully managed, remote communication and IT solutions, today announced its financial results for the six-month period ended June 30, 2017, with group revenues of US$ 246.3 million, a 143% period-on-period increase.
Financial Highlights
- Group revenues grew 143% to US$ 246.3 million for the period ended June 30, 2017, while service revenues grew 165% to USD 231.9 million.
- Underlying EBITDA profitability was US$ 52.8 million, a 210% increase over the same period last year. EBITDA margins grew 470 basis points to 21.4% in 1st Half 17.
- Underlying NPATA, excluding non-recurring costs, was US$ 15.1 million, an increase of 86% period-on-period.
- Strong operating cash flows (96% of underlying EBITDA), generated as a result of improved working capital disciplines, delivered balance sheet de-leveraging in line with expectations. Net debt reduced from US$ 356 million at 31 December 2016 to USD 333 million at 30 June 2017.
- The Board declared a fully franked interim dividend of Australian $ 2.40 cents per share for the six-month period ended 30 June 2017, consistent with the final dividend for 2016 and utilising the maximum amount of franking credits.
Operational Highlights
- On January 1, 2017 Speedcast completed the acquisition of Harris CapRock. The acquisition positions Speedcast as the leader in the key vertical markets of Energy and Maritime. As a result of the integration, Speedcast will have the largest global satellite footprint, which will provide unprecedented value to our customer base.
- Since the acquisition, Speedcast has completed 80% of the identified Harris CapRock integration milestones. Key initiatives remaining include ERP implementation, full integration of the ticketing system, and network consolidation. The investment thesis is being proved out as a result of the increased synergies. Additional cost synergy benefits have been identified with total cost synergies now expected to be over USD 30 million compared with US$ 24 million previously communicated.
- Speedcast had a 100% renewal rate within the Energy sector for the first half of th! e year. The group is positioning itself to be the partner of choice to lead the customers through the recovery.
- The Maritime group made significant progress in the integration of the Cruise business, while establishing relationships with key customers. In addition, a successful pilot was completed demonstrating 400 Mbps to a single cruise ship.
- Speedcast is experiencing a strong win rate within the Cellular Backhaul market. Cellular Backhaul will be one of the fundamental growth areas in the satellite industry for the next 10 years with double digit CAGR growth expected (Source: NSR).
- On July 23, 2017 Speedcast entered into a definitive agreement to acquire UltiSat for a purchase consideration of up to US$ 100 million. This acquisition will give Speedcast its fourth growth pillar, Government. Retail revenues for the Government sector are expected to reach USD 9.3 billion by 2025, up from the current market size of USD 4.8 billion (Source: NSR).
"We are very proud of the progress we have made since the completion of the acquisition of Harris CapRock", said Pierre-Jean Beylier, Chief Executive Officer of Speedcast. "Amidst a difficult market background, Speedcast has executed well, both from a financial and an operational perspective. We are taking advantage of the opportunities in all of our target markets, and delivering world-class, innovative global solutions. Speedcast is well positioned to deliver value to our customers, partners and shareholders in 2017 and beyond."
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