Al Yah Satellite Communications, better known as Yahsat, swung to a profit in the third quarter as revenue received a boost from the strong performance of its mobility solutions business and higher finance income.
Net profit attributable to shareholders of the company for the three months to the end of September stood at $26.4 million, compared with a loss of $10.2 million during the same period last year, the company said on Tuesday in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.
Revenue for the period grew by 8 per cent annually to $117.4 million, which was the second highest on record. Finance income more than doubled to $7.7 million.
The company’s nine-month profit attributable to shareholders more than doubled to $71.7 million as revenue grew by 2.5 per cent to $322.5 million and finance income jumped more than four times to $18.7 million.
“Our reported revenue growth for the nine-month period, underpinned by one of the strongest third quarters on record, has resulted in improved financial guidance for 2023 and means that we are well positioned to record our strongest ever performance for the full year,” group chief executive Ali Al Hashemi said.
“Our financial position, with record low leverage, has never been stronger and continues to support our attractive progressive dividend policy.”
Yahsat, a subsidiary of Abu Dhabi’s sovereign investment arm Mubadala Investment Company, offers satellite services in more than 150 countries across Europe, the Middle East, Africa, South America, Asia and the Australasia region.
The company has a “historically strong balance sheet with record negative net debt of more than Dh583 million [$159 million]”, total available liquidity of Dh2.6 billion and long-term visibility of future cash flows up to 2043, it said
This will support Yahsat's “future investment in organic growth including for its Al Yah 4 and Al Yah 5 satellites and opportunistic acquisitions, without impacting its attractive progressive dividend policy”, it said.
In September, Yahsat was awarded a Dh18.7 billion, 17-year services mandate by the UAE government to provide satellite capacity and managed services.
Under the new mandate, Yahsat will provide services using its Al Yah 1 and Al Yah 2 satellites, currently in orbit, and supplement this with two new satellites, Al Yah 4 (AY4) and Al Yah 5 (AY5), which are expected to be launched in 2027 and 2028, respectively.
The company said it is on “track” to grow the full-year 2023 dividend by at least 2 per cent to 16.46 fils a share or Dh402 million – based on the last closing share price, which continues to imply an annualised dividend yield of more than 6 per cent.
Guidance for full-year revenue, earnings before interest, taxes, depreciation and amortisation (ebitda) and cash capital expenditure and investments remains unchanged, while guidance for discretionary free cash flow has been increased to a range of $140 million to $160 million, from $130 million to $150 million, Yahsat said.
The company expects $435 million to $455 million in gross revenue this year, $240 million to $260 million in adjusted ebitda and $175 million to $195 million in cash capex and investments.
Yahsat remains in a strong position to take advantage of consolidation opportunities in the industry, underpinned by its backlog of future revenue and the company’s historically strong balance sheet, it said.
The Thuraya-4 NGS satellite, which is being constructed, remains on track for launch in 2024 and entry into service in the first half of 2025, it added.