Inmarsat cuts full year revenue guidance on back of maritime, energy slowdown

Satellite company Inmarsat has cut its full year revenue guidance by $50m to a range of $1.175bn - $1.250bn as the recession in global maritime and energy markets continued.

First quarter earnings before interest, tax, depreciation and amortisation fell 6%) to $166.2m. Revenue for the quarter fell 2% from the previous year to $298.6m.

The full year downgrade excludes contributions from its deal with US firm Ligado. Inmarsat said new guidance for Ligado revenues is higher than expected.

Group revenues in 2018, excluding Ligado but including the I-5 F4 satellite programme, are expected to grow to between $1.45bn and $1.6bn.

The company said it had agreed transitional arrangements with Ligado to secure around $337m of payments from 2016-18 under the 30MHz spectrum option, with transition to the new plan postponed and Inmarsat being granted enhanced spectrum usage rights until Ligado receives its FCC license and meets certain other conditions.

“As part of these arrangements, Inmarsat has agreed to defer certain contracted payments, which will provide Ligado with the best opportunity to establish a successful and sustainable long-term business to the benefit of both parties.,” Inmarsat said.

"Many of our markets face short-term headwinds which intensified in the first quarter, leading to a softer revenue performance than expected, although we remain highly competitive in each of our core markets, growing market share and diversifying the business to plan,” said chief executive Rupert Pearce.

“Sustained recession in global maritime and energy markets continues, and in Maritime in particular good growth in our newer products continues to be more than offset by the decline of our older products and by lay-ups and scrappage of installed ships. Government provided a brighter spot, particularly outside the US and Aviation continued to grow at substantial double digit rates.”