The UN certified Iridium Communications to provide Global Maritime Distress Safety System (GMDSS) services, ending Inmarsats monopoly on the internationally required service for ships, Iridium said May 21.
At the moment it's the short/near term sp that interests me. The long term prospects remain a subject that better minds than mine have failed to agree upon. And whether I continue to hold after extricating myself from my current loss is a decision for another day.
The sp trend has been good (though hardly spectacular) since around April 4th with successive lows being less low. If it reaches and maintains the 395-400 range going into June then we may at least have seen the worst. Any further knock back to 370 would now, on the other hand, be a very unwelcome omen as far as I'm concerned.
While I thought the full year results were better than the market gave credit for these ones were slightly worse. What do I know! Carry on as you were for a while. Good to see underlying growth continuing strongly though for when we can flip that revenue mix.
London, UK: 2 May 2018. Inmarsat plc (LSE: ISAT.L), ("Inmarsat", "The Group"), the leading provider of global mobile satellite communications services, today announces financial results for the three months ended 31 March 2018.
$ in millions
· Group Revenue increased $15.9m (4.8%) to $345.4m (up 5.0% to $313.3m, excluding Ligado), driven by growth in Aviation, Enterprise and Maritime:
o Maritime: continued year-on-year revenue growth, supported by further market traction with Fleet Xpress ("FX")
o Government: lower contracted revenue from Boeing Take-or-Pay contract and the end of exceptional operational revenue outside the US, as expected in both cases
o Aviation: continued double digit revenue growth in both In-Flight Connectivity ("IFC") and our Core Aviation business
o Enterprise: first quarter of significant growth for some time, mainly driven by double digit growth in satellite phone airtime and handset revenues
o GX: airtime and related revenues of $50.0m (Q1 2017: $32.1m), driven by growing customer take-up in Maritime, Government and Aviation
· Group EBITDA: decreased by $8.2m (4.5%) to $174.9m (down 6.1% to $142.8m, excluding Ligado), reflecting the growth in revenue offset by changes in revenue mix, particularly in Government, and an adverse impact of currency movements on indirect costs of $9.1m
· Adjusted Profit After Tax (excluding impact on income statement of unrealised conversion liability on 2023 convertible bond): declined $23.3m, reflecting changes in EBITDA, depreciation, financing costs and taxation. Statutory PAT, (including the unrealised conversion liability element) increased $59.2m
· Outlook and future guidance unchanged
1 2017 figures have been restated throughout this announcement to reflect the adoption of IFRS15 and the reclassification of short term deposits. The Group has also adopted IFRS16 and IFRS9 as of 1 January 2018. Please refer to Appendix 2 of this announcement for further details.
2 "Other" revenue comprises revenue contribution from Central Services and Ligado Networks.
3 In response to the Guidelines on Alternative Performance Measures ('APM's) issued by the European Securities and Markets Authority ('ESMA'), we have provided additional information on the APMs used by the Group including definitions and reconciliations to statutory measures within Appendix 1 of this document.
Rupert Pearce, Chief Executive Officer, commented on the results:
"Inmarsat delivered another solid performance in the first quarter of 2018, with good revenue growth, building on the positive momentum we achieved during the course of 2017, and continued strategic progress, especially in Maritime with FX and in our nascent IFC business in Aviation.
"Given our track record, unique capabilities, differentiated market position and strong channels to market, we are increasingly well placed to deliver further annual revenue growth across all of our target Maritime, Government, Aviation and Enterprise markets."
Outlook & future guidance
As outlined at our 2017 financial results on 9 March 2018, we remain confident about the growth outlook for the business and we reiterate all elements of our future guidance, as disclosed at that time. Our specific financial guidance remains unchanged, as follows:
IAG are clearly in charge of giving a launch date but they're well advanced in the installation of the Imarsat product. If you're investing a large amount of money you don't sit about when the work is complete so I'm hoping the June date given earlier in the year will be hit. Perhaps I should be more than hopeful because the article says that Deutsche Telekom 'feel certain" that it will go live this summer.
The next stage could see a large ramp up in sales:
"Meanwhile, Balaam is optimistic the group will see rapid EAN take-up beyond BA. He says hes finding himself in weekly meetings with airlines. People were holding back before, he says, and thats no longer the case. I think the demo we did with Deutsche Telekom at the Mobile World Congress was absolutely striking. Youve got people doing FaceTime calls between planes, which is pretty impressive.
A big BA launch, followed by more sales can turn this around quickly IMHO.
The BA web page seems live
You might be right. I can't recall where I heard it. The when was last year's results. I'm sure it was reported somewhere that they were cutting back on the moonshots and that one of them being defunded was Loon.
This is a hot industry still in it's infancy. As such a lot of competitors are emerging. The other relevant point is that demand will almost certainly increase exponentially.
As such over the next 5 years or so I would expect there to be a lot of consolidation, some competitors to fall away and others to emerge with 2 or 3 ending up as major players.
Looks like we're already starting to see that happening. I think we can also start to count out some of the more whacky projects (think I heard somewhere that Google had cancelled Project Loon).
The 4 or 5 LEO projects underway will face challenging technical and regulatory issues. They will take longer than expected. I doubt there will be 30,000 LEO satellites in 5 years time all communicating freely and maintaining connectivity with moving airplanes. No doubt 1 or 2 of them will get it right though.
I suspect what will emerge is a group of companies that cooperate to provide services over long distances of water as well as higher capacity over densely flown continental routes and tailored to different customer types. All probably using a combination of geostationary and LEO satellites; and ground based boosters.
ISAT is the first mover and already has a lot of experience. It has a lead on acquiring customers and should be better than most at avoiding the pitfalls of getting their service up and running.
I can't honestly say where they will be in 5 years time. I would feel better if it were starting from a higher SP though because if they are to be bought out as part of the consolidation I need a 70% premium on where we are to break even.
Navarino Selected by Oldendorff Carriers for Inmarsat Fleet Xpress Implementation
Throughout 2018, all Oldendorff Carriers owned vessels will be fitted with Inmarsat Fleet Xpress and Navarinos Infinity Cube Cloud-based solution, which will host the Inmarsat Fleet Xpress soft Network Service Device (NSD).
A very interesting piece of well informed information relative to aircraft and internet connection, personally bought into ISAT recently, taking this aspect of communication as relative after noting that 2 aircraft leased by DPA had been taken out of service for the installation of in flight broadband. Another aspect which i read with interest was the ground radar element, which with the proposed onset to 5G will require some form of ground inter connection of receptive masts within more local areas than at present.
If the satellite element or just the ground radar element were to be incorporated within this process the benefits would be exceptional for ISAT in total return.
Your views would be appreciated, DYOR regards
The Earth is 2/3 water....
Most of which isn't flown over. Check this link to see (in real time) where commercial flights fly globally: https://www.flightradar24.com/
Killermanj's post is spot on. There's undoubtedly a place for satellite in aviation connectivity but the latency or delays via satellite circuits appear to make the ground path preferable when it's available - hence the interest in Nokia's technology.
Inmarsat and Deutsche Telekoms new hybrid European Aviation Network (EAN) has its own stand for the first time, where visitors are invited to experience first-hand a service that its developers believe is about to transform Europes in-flight connectivity market.
EAN is the worlds first [combined] satellite and ground network, says Deutsche Telekom vice-president in-flight services and connectivity David Fox.
The service uses a combination of Inmarsats S-band satellite and Deutsche Telekoms newly-completed network of 300 cellular towers to provide what the two companies say will be a seamless in-flight connectivity experience that is ideal for the dense European aviation market.
EAN is scheduled to enter commercial service with launch customer British Airways in the first half of this year. International Airlines Group (IAG) is in the process of installing the system on up to 341 of its member carriers Airbus A320-family aircraft.
The booth displays that EAN is not a dream anymore its a reality and its live over Europe, says Inmarsat Aviation vice-president of strategy and business development Frederik Van Essen.
Fox says the hybrid system is ideally-suited to the European market because there is a high number of people on short-haul flights, there is high density and you need lots of capacity, so only a satellite- and ground-based system has the required capacity and throughput.
The model could be replicated elsewhere, says Thorsten Robrecht, vice-president advanced mobile networks solutions at Nokia. The telecommunications company is a technology partner in EAN.
There is lots of global interest beyond Europe. Its applicable where lots of aircraft are flying over a large land mass in all of these countries theres huge interest in repeating it, he says.
I think the google move fully vindicates ISAT and DT's approach with the EAN. Traditional satellite WiFi on planes hasn't been good enough but the speeds talked about with the EAN are game changing and they seem to be, to a large part, due to the ground components in Europe. Google could be the most technical savvy company on the planet and they're immediately recognising a ground solution is the way forward. It's why ISAT competitors are so worried about what ISAT have managed to achieve with DT to produce the EAN.
IAG are due to go live on the EAN in the first half of this year. I'm convinced we'll see this re-rate as the EAN takes off...
(Has this share really gone up for two days in a row??)
The Earth is 2/3 water. Ground sourced connections make sense in the densely populated areas and is commercially quite easy (like fibre to door for townies) but uplinks from rural areas expensive to implement and not reliable without satellite.
ISAT are onto a winner unless sour grape competitors persuade government blocks, and it is this piece of uncertainty holding the share price back.
ok, but the airplane needs both to offer a credible service... isn't it?
also, one of the issues of the land component is that e.g. to cover all north america you need to carry power and backhaul to very remote areas... power may be solved by solar and batteries, but then you need to run links at line of sight using microwave to reach suitable bandwidth to cover several aircrafts at a time... I do not know but this land component may need satellite help also in remote land areas, e.g. arctic Canada, deserts, Greenland... siberia...
anyhow... this is just speculation on my side... and By the way the EAN is still to see any bytes transmitted or received commercially... wait and see.
can google buy this and not the satellite component?
This lack of dependency on satellite seems to be the basis of Viasat's claims concerning the EAN ground network licences. If you look at Flightradar24, for example, you'll see that the vast majority of air traffic is over land at any given time even though there are obviously long periods over sea for long-haul flights where satellite is the only solution.
The 'highest highs' continue to be ever lower for ISAT - more technically, the trend is ever lower - certainly since March 6th but,critically, since the annual results. This still seems to have some way to go unless it regains and holds 360 convincingly in the next few days. Every 'inverse head and shoulders' on ISAT's chart has been a fake bottom so far. Ripley was 'in' at 335 - if you are 'long' then you'll be hoping he judged it well!
A thing is only really worth what someone is prepared to pay for it, of course, but this analyst (who is presumably not actually buying any) thinks ISAT is worth about £4.78 per share:
She explains: 'Today I will be providing a simple run through of a valuation method used to estimate the attractiveness of Inmarsat Plc (LSE:ISAT) as an investment opportunity by taking the forecast future cash flows of the company and discounting them back to todays value.'
I guess her view is as valid as any of the other analyses we've seen.
I guess you had your reasons Ripley - ISA timing and all that - so 'Good Luck!' But when this sunk below yet another of my red lines (360) I decided to stay well back and see if it gets down to - and holds - 300. I'm now anticipating buying in the high 200's.
In the meantime, Digital Look indicates that Credit Suisse rated this an outperform with target sp 810 as recently as 9th March. RBC were apparently touting 725 on the 14th March. What kinda crystal ball are they using I wonder!
Most other recent brokers are now 'hold/neutral' with targets between 420 and 575. The average for all the March brokers on Digital Look puts this at above a fiver. Seems bizarre - but then they've tended to be much too high for a long time now.
Just three weeks ago I flippantly suggested that around 275 looked feasible for a couple of reasons: chart based and restoration of yield to around 5%. The sp of the last few days has remained on course for that. Wasn't the IPO thirteen years ago priced at about 245p?
ISAT regrettably looks like a one-way ticket for the time being.
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