Yahsat first-half earnings rise on robust performance

Infrastructure business was the largest contributor to the group's revenue, which remained stable at $205 million

Yahsat stand at IDEX 2023. The company offers multi-mission satellite services in more than 150 countries across Europe, the Middle East, Africa, South America, Asia and Australasia. Khushnum BhandariShow more

Al Yah Satellite Communications, better known as Yahsat, has reported a 5 per cent rise in its first-half income, boosted by the strong performance of its infrastructure business.

Normalised profit for the six-month period to the end of June climbed to $48 million, the company said on Tuesday in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

The company’s normalised adjusted earnings before interest taxes, depreciation and amortisation (Ebitda) for the reporting period rose 3 per cent on an annual basis to $125 million.

Yahsat’s revenue during the first half of the year remained stable at $205 million, driven by its infrastructure business, the group’s largest business providing communications capacity to the UAE government, as well as its data solutions business that provides satellite-based broadband services, the company said.

“Yahsat continues to improve its business operations and profitability, and we remain focused on growing both our core government business and commercial segments, whilst controlling and optimising costs across the group," Ali Al Hashemi, group chief executive at Yahsat, said.

Founded in 2007, the subsidiary of Abu Dhabi’s sovereign investment arm Mubadala Investment Company offers multi-mission satellite services in more than 150 countries across Europe, the Middle East, Africa, South America, Asia and Australasia.

Yahsat remains in a strong position to take advantage of consolidation opportunities in the industry, underpinned by its backlog of future revenues and the company’s historically strong balance sheet.

“The satellite industry continues to witness substantial investments and the development of new business models. Together, these forces are driving industry consolidation and the necessary emergence of larger and stronger players,” Mr Al Hashemi said.

This year, Yahsat is aiming for revenue growth of above 5 per cent, driven by its managed solutions segment as well as new lines of business, its chief financial officer Andrew Cole told The National in March.

The company expects revenue of between $435 million and $455 million and adjusted Ebitda of between $240 million and $260 million this year, he said at the time.

The company is keen to acquire assets globally in the Internet of Things sector following its investment in eSat Global, a US-based IoT connectivity solutions provider, Sulaiman Al Ali, Yahsat's chief commercial officer, told The National in an interview in October.

At the end of June Yahsat had negative net debt of more than $125 million and total available liquidity of $686 million, which supports “Yahsat’s future investment in organic growth … and opportunistic acquisitions, without impacting its attractive progressive dividend policy”, the company said.

Yahsat’s contracted future revenue remained stable at $1.9 billion as compared with the level achieved at the end of the first quarter of this year.

The company is on track to grow its full year 2023 dividend by at least 2 per cent to 4.48 US cents per share, or $109 million.

Based on the last closing share price, this implies an annualised dividend yield of over 6 per cent, among the highest offered by UAE-listed stocks, it said in a separate statement to the bourse.

Guidance for full year revenue, Ebitda, and discretionary free cash flow remains unchanged.

Cash capital expenditure and investments guidance, however, is increased to the $175 million to $195 million range from the previous $155 million to $175 million, reflecting the commencement of the Al Yah 4 and Al Yah 5 satellite procurement programme.

“In addition to completing the Thuraya-4 NGS satellite procurement programme, which remains on track to be launched in the first half of 2024, we have signed an authorisation-to-proceed with Airbus, a long-time partner of Yahsat, to commence initial activities relating to the procurement of the Al Yah 4 and Al Yah 5 satellites,” Mr Al Hashemi said.

“In parallel, we are in advanced negotiations with the UAE government to secure a long-term contract that would significantly increase and extend our backlog of contracted revenues beyond 2040.”

The company currently has five satellites that extend its reach to more than 80 per cent of the world’s population, enabling critical communications such as broadband connectivity, broadcasting and mobility solutions.

In May, Bayanat, a geospatial data products and services provider, and Yahsat launched a space programme aimed at building national satellite remote sensing and earth observation capabilities within the UAE.

The space programme will look for business opportunities in the local and global earth observation market, Bayanat said in a statement to the ADX at the time.