SES slows decline of video business, highlights HD+

Satellite operator SES has delivered a respectable set of quarterly results, with strong growth in the government sector helping push its Q2 top line ahead of expectations, with a slowing rate of year-on-year decline.

Overall, SES delivered revenues of €875 million over the first half, down 3.3% at constant currency. However, the prior year period included €8 million in ‘periodic’ revenue that was absent this year, adjusting for which left a 2.5% decline.

In video, the Luxembourg-based operator reported revenues of €526 million, down 3.9% compared with a year-on-year decline of 8% last year. Declines in mature markets, moves to “reduce exposure to low margin services activities” and lower US wholesale revenues were partially offset by higher revenues in emerging markets, growth in the number of customers paying for the HD+ service in Germany and a revival in occasional use.

Adjusted EBITDA was €544 million, down 2.5% at constant currency. The operator said that its bottom line benefitted from a reduction in operating expenses. The figure accounted for restructuring expenses  and C-band repurposing expenses totalling €13 million.

As of the end of June, SES was carrying over 8,650 TV channels to 361 million homes, with HD channel numbers rising by 8% to 3,120. Some 69% of TV channels were broadcast in MPEG-4, with 4% being broadcast in HEVC.

CEO Steve Collar said that “the lasting value of our video business is reflected in the improved trajectory, the important long-term renewals at our core neighbourhoods, increased penetration of HD TV channels, and new paying subscribers for HD+ in Germany. Excitingly, in H2 2021, we will be expanding and enhancing our HD+ portfolio with the extension onto mobile devices and IP-enabled non-satellite homes.”

Analysts at Jefferies praised the company’s performance, noting the operator’s EBITDA guidance upgrade and highlighted the government sector as the “main outperformer” in Q2.