The launch of Eutelsat Quantum, planned for the third quarter of calendar 2020, is likely to be delayed, the company announced.
In the light of the impact in the third and fourth quarters, Eutelsat has estimated the risk to FY 2019-20 revenues resulting from the COVID-19 crisis is of the order of $21m.
In consequence, the satellite operator now expects revenues from the five operating verticals of around $1,367m, compared with their previous expectation of revenues in the lower end of a range of $1,389 to $1,438m. This limited impact highlights the resilience of the company’s overall activities.
In a statement, Eutelsat said: “We continue to assess the effect of the crisis on the outer years. While this is ongoing, we are temporarily suspending our objective of Discretionary Free-Cash flow of circa $547m in the Fiscal year 2021-22, although we are confident our business will remain highly cash generative. An updated objective will be provided by the end of July.”
Revenues at the end of February were in line with the company’s expectations; however, these effects will be progressively felt in the third and fourth quarters of the current Financial Year (2019-20), and are likely to be reflected at least into the early months of FY 2020-21, together with a more generalised slowdown in the pace of new business, the company said.
Elsewhere, the crisis is affecting the operations of other players in our supply chain, notably satellite manufacturers, launchers, and gateway installers, with the following impacts:
The deployment of ground gateways supporting the operations of Eutelsat Konnect is likely to be partially delayed.
In consequence, the revenue ramp-up of these two expansion satellites will be pushed out. This will have no impact on revenues of the current fiscal year, but delays will affect our expectations for FY 2020-21, Eutelsat said.
Commenting on the figures, Rodolphe Belmer, Chief Executive Officer of Eutelsat Communications, said: In this unprecedented context, our focus is on the health and well-being of our employees and wider communities and on ensuring full business continuity for our customers, at a time when the demand for high quality, reliable connectivity has never been higher.
Our combination of resilient heritage activities complemented by connectivity-related growth opportunities, together with our well-embedded strategy of strict financial discipline, aimed at preserving a solid liquidity position and strong cash generation capacity, mean we are well placed to withstand the challenges of the current environment and to revert to our regular dividend policy as soon as circumstances permit.