Inmarsat maintains 'solid' momentum in first quarter

Inmarsat posted its results for the first quarter on Thursday, claiming “solid performance” as group revenue grew 11.3% to $332.2m, or by 7.5% to $301.7m excluding Ligado.

The FTSE 250 company said EBITDA was 9.2% firmer at $181.5m, or 1.8% higher at $151.0m when discounting the contribution of Ligado.

On a divisional basis, maritime revenue was down 2.8% to $139.1m, while government added 25.2% to $86m and aviation surged 41.7% to $44.2m.

The company’s enterprise division was 13.5% softer on revenue at $29.4m, while other operations gained 55.1% to $33.5m.

Adjusted profit after tax was up 14.5% at $52.2m, whilst Inmarsat’s statutory profit after tax plunged 113.4% to a $6.1m loss.

“Positive momentum was maintained across our business in the first quarter of 2017, following on from an encouraging performance in the final quarter of last year,” said chief executive Rupert Pearce.

“This was achieved in spite of cyclical recession and other headwinds in many of our core markets.”

In its maritime division, Inmarsat continued to successfully ramp up the installation of Fleet Xpress, supported by a number of installation partners, whilst its “market-leading” distribution network for Fleet Xpress was further bolstered by the addition of Satlink during the quarter.

“Our core FleetBroadband product delivered a resilient performance in the quarter and we made good progress on the new growth opportunities afforded by our new Fleet One service,” Pearce said.

Its government businesses delivered another good performance, the board claimed, supported by the introduction of GX and sustained operational tempo in one particular region.

During the period, Inmarsat announced its selection by AT&T as a core team member for the US FirstNet network, for the provision of satellite communications solutions.

In Aviation, Inmarsat’s core business produced further strong growth in the quarter, during which time the company installed its first terminals for JetConneX, its GX-based product for the business and general aviation market.

“In IFC, we had completed 65 installations for the Deutsche Lufthansa Group by the end of the period, up from 20 at the end of 2016, and we confirmed that IAG have agreed to utilise our IFC services over the EAN, for which our plans for commercial deployment remain on track,” Pearce confirmed.

“So far in the second quarter of 2017, AirAsia and Qatar Airways have announced commitments to utilise GX for their IFC services, representing excellent progress on building revenue backlog for this new business, and we remain in discussions with a number of other airlines for the provision of our IFC services.”

Supported by its performance in the first quarter of 2017, Inmarsat said it remained “well-placed” for the medium term.

“We have well-established and proven communication networks, substantial spectrum assets to fuel those networks, differentiated capability in running global mobility services, a market-leading global distribution network and a significant base of loyal customers to whom we will continue to provide high quality service and delivery.

“These elements, particularly in challenging markets at a time of substantial change, provide Inmarsat with a strong foundation from which to capture the significant growth opportunities that will emerge in the coming years,” Pearce commented.

The company’s board announced separately on Thursday that Warren Finegold was to join its board later in the year as a non-executive director.

It said Finegold had a “wealth” of “diverse and relevant experience” - combining a knowledge of mobility and technology markets, having been a member of the Vodafone Group executive committee for over 10 years, plus "significant experience" in investment banking.