Intelsat hit by African oversupply, lower US government spending

Lower US government spending and oversupply of capacity in Africa delivered lower annual revenues and a bigger overall net loss for Intelsat in 2013. However the satellite operator turned in positive net income for the final quarter as reduced operating expenses and interest payments on debt delivered a positive impact.

Intelsat posted full year revenues of US$2.6 billion (€1.9 billion), down from US$2.61 billion in 2012, with a net loss of US$226 million against US$151 million in 2012. Net income for the fourth quarter was US$73 million on revenues of US$643 million against a net loss of US$6 million on revenues of US$672 million in 2012.

CEO David McGlade said that the fourth quarter saw solid bookings and renewals, giving the company a year-end order backlog of US$10.1 billion.

McGlade said the completion of Intelsat’s IPO and refinancing of its debt had enabled it to begin delivering and reducing its debt servicing costs.

However, he said that continued lower US government spending and lower prices in Africa would continue to have an impact this year.

“Performance overall continued to reflect two trends affecting our revenue growth, including the on-going effects of reduced U.S. government spending and the oversupply environment in Africa, which affects pricing within network services applications in that region,” said McGlade.

“At present, we believe these factors will persist in 2014, resulting in overall reduced revenues for the full year compared to 2013, while our mix of business and strong financial discipline should enable us to deliver Adjusted EBITDA margins consistent with 2013 results.”