Intelsat announces second quarter 2020 results highlights
Intelsat S.A., today announced financial results for the three months ended June 30, 2020.
Intelsat reported total revenue of $482.0 million and net loss attributable to Intelsat S.A. of $405.4 million for the three months ended June 30, 2020.
Intelsat reported EBITDA, or earnings before net interest, gain on early extinguishment of debt, taxes and depreciation and amortization, loss of $18.8 million and Adjusted EBITDA of $342.4 million, or 71 percent of revenue, for the three months ended June 30, 2020.
Intelsat’s Chief Executive Officer, Stephen Spengler, said, “Our business demonstrated resiliency in a challenging operating environment, highlighted by a sequential quarterly increase in revenue and Adjusted EBITDA largely from the successful execution of a new agreement with Speedcast in our network services business. Financial results, when compared to the same period last year, reflect the ongoing challenges in our network services business due to the impacts of COVID-19 in the cruise maritime and aeronautical mobility, despite booking new business in merchant maritime and enterprise network applications. The decline in the media business was driven by ongoing secular headwinds that we have experienced over several quarters. Finally, the government services business delivered year-over-year growth in revenues resulting from strong uptake of third-party services and growth in our new FlexGround managed services."
Spengler concluded, “During the period we filed our initial C-band transition plan with the FCC, detailing our roadmap to meet their accelerated spectrum clearing deadlines. The final transition plans are due to be filed with the FCC on August 14, 2020. We will consult with the FCC and continue to refine our plan as that date approaches. Ongoing engagement with our supply chain, vendors, and customers gives us a high degree of confidence that we can execute our transition plan and ensure that the U.S. maintains its 5G leadership position."
Second Quarter 2020 Business Highlights
Intelsat provides critical communications infrastructure to customers in the network services, media and government sectors. Our customers use our services for broadband connectivity to deliver fixed and mobile telecommunications, enterprise, video distribution and fixed and mobile government applications.
Network services revenue was $176.7 million (or 37 percent of Intelsat’s total revenue) for the three months ended June 30, 2020, a decrease of 5 percent compared to the three months ended June 30, 2019.
Media revenue was $202.6 million (or 42 percent of Intelsat’s total revenue) for the three months ended June 30, 2020, a decrease of 9 percent compared to the three months ended June 30, 2019.
Government revenue was $96.1 million (or 20 percent of Intelsat’s total revenue) for the three months ended June 30, 2020, an increase of 3 percent compared to the three months ended June 30, 2019.
Average Fill Rate
Intelsat’s average fill rate at June 30, 2020 on our approximately 1,675 36 MHz station-kept wide-beam transponders was 75.1 percent, as compared to an average fill rate at March 31, 2020 of 78.5 percent on our approximately 1,675 transponders. In addition, at June 30, 2020 our fleet included approximately 1,225 36 MHz equivalent transponders of high-throughput Intelsat Epic capacity, reflecting no change from the prior quarter.
At June 30, 2020, Intelsat’s contracted backlog, representing expected future revenue under existing contracts with customers, was $6.4 billion, as compared to $6.6 billion at March 31, 2020.
C-band Proceeding at the U.S. Federal Communications Commission (FCC)
On June 19, 2020, the Company successfully filed its initial C-band transition plan with the FCC. This comprehensive plan was submitted after two years of coordinated outreach with customers, vendors, and industry stakeholders to ensure that Intelsat is well positioned to achieve the milestones outlined in the FCC's C-band order. Given those proactive efforts, Intelsat is poised to expedite the accelerated clearing process while maintaining the high-quality service to our customers and helping the U.S. defend its technology leadership position by providing valuable spectrum on which it can deploy next generation 5G networks.
Subsequent to the end of the period, comments were submitted to the FCC on Intelsat's initial transition plan from a number of C-band stakeholders and interested external parties. The Company is currently reviewing the comments and working with the FCC to constructively address any relevant concerns. Intelsat expects to provide feedback on these comments by the August 14, 2020 deadline.
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