Yahsat reports strong first quarter results for 2024

Profitability, cash flow and capital expenditure guidance reiterated

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Published: Tue 14 May 2024, 7:23 PM

Last updated: Tue 14 May 2024, 7:24 PM

Al Yah Satellite Communications Company PJSC (Yahsat), the UAE’s flagship satellite solutions provider listed on the Abu Dhabi Securities Exchange, on Tuesday announced that net income for the three months ended 31 March 2024 almost doubled to Dh194 million.

Revenue grew one per cent for the period versus the prior year to a record Dh371 million. Earnings before interest, taxes, depreciation and amortisation (Ebitda) grew 58 per cent to Dh352 million. On a normalised basis, adjusting for material, one-off items to allow like-for-like comparison, Ebitda grew seven per cent to reach Dh247 million and net income fell 8 per cent to Dh99 million, reflecting the introduction of UAE corporate tax this year.

Underpinning this strong performance was revenue growth across two segments. Infrastructure, the group’s largest segment providing communications capacity to the UAE Government by means of an index-linked long-term contract, continued to grow its year-on-year revenues by one per cent. Managed Solutions, the group’s second largest segment by revenue, providing complete value-added satellite communications solutions primarily to the UAE Government and related entities, reported impressive revenue growth of 19 per cent as well as higher margins, building on a strong prior year performance. The Mobility Solutions segment, which provides mobile satellite services using L-band spectrum, recorded lower revenues, mainly on fewer equipment sales. Data Solutions, the smallest segment, offering satellite-based broadband data solutions, saw revenues fall on lower subscriber numbers.

Highlights for the period include:

•Revenue of Dh371 million, up 1 per cent year-on-year with growth across the Infrastructure and Managed Solutions segments.

•Normalised Ebitda of Dh247 million, up 7 per cent year-on-year, with a double-digit reduction in the normalised cost base resulting in an expanded margin of 67 per cent (prior year 63 per cent).

•Normalised Net Income (profit) of Dh99 million, down 8 per cent versus the prior year period, due to the introduction of UAE corporate tax (9 per cent rate); margins remained strong at 27 per cent (prior year 29 per cent).

•Contracted future revenue of Dh24.7 billion, equivalent to approximately 15 times last-twelve-month revenue and only 1 per cent lower versus year end 2023.

•Strong cash generation with Discretionary Free Cash Flow of Dh252 million, more than double the prior year figure driven by improved collection of receivables.

•Historically strong balance sheet with an improved cash position of Dh2.3 billion, negative Net Debt of Dh596 million, Dh3.7 billion expected in new advance payments, access to a $300 million undrawn bridge facility and long-term visibility of future cash flows up to 2043. The Group continues to be well positioned to fund growth capital expenditures, opportunistic acquisitions and dividends.

•Guidance for Ebitda, cash flow and CapEx is reiterated but has been revised lower for full year revenues. Following an anomaly experienced on the Thuraya 3 satellite in April 2024, as recently disclosed, revenue guidance has now been revised down to Dh1.5-1.6 billion from Dh1.6-1.7 billion.

Ali Al Hashemi_Group Chief Executive Officer of Yahsat

Ali Al Hashemi, group chief executive officer of Yahsat, commented: “Yahsat has achieved another set of strong quarterly results, demonstrating further progress in growing our core business of serving the UAE Government’s requirements for satcom solutions. We also continue to progress toward finalising the full contract for the new US$5.1 billion Capacity and Managed Services Mandate with the UAE Government and the related procurement contract with the satellite manufacturer for two new satellites, Al Yah 4 and Al Yah 5. Further, we are working on completing the procurement of Thuraya 4, to be launched into space in the second half of this year, which will renew and continue Thuraya’s success story for many more years to come.

“Lastly, following the recent shareholder approval of the merger with Bayanat, we are now working toward completing the merger in the second half of the year and finalising plans for the successful integration of the two companies. This merger will usher in an exciting new chapter, positioning Space42 as an AI-powered space technology champion in the MENA region with global reach. For the first time in our industry, we will combine advanced satcom solutions and geospatial analytics, operating communication and Earth Observation satellites across multiple orbits.”