Inmarsat reports depressed pre-tax profit on lower US government spending
05 Aug 2014
Satellite company Inmarsat PLC today posted lower pretax profit as it took a hit on lower US government spending and higher depreciation charges, but revenue, and operating profits increased, driven by demand from the maritime and aviation sectors, Alliance News reported.
It warned however of a hit from the recent failure of a rocket launch vehicle, which would delay the launch of the second and third of its Inmarsat-5 satellites and hence the launch of its new Global Xpress services on a global basis.
Inmarsat posted a pretax profit at $168.3 million for the six months to 30 June, down from $185.5 million a year earlier, due largely to higher depreciation costs as new satellites entered service and started to depreciate and due to an adjustment for the Stratos business it previously sold.
Earnings before interest, tax, depreciation and amortisation increased to $369.7 million, from $329.2 million a year earlier, as revenue rose to $652.3 million, from $640.3 million, on maritime and aviation demand, and as operating costs declined by $28.5 million.
The company's satellites provide mobile communications across the world. Last December, the company launched the first satellite for its new Global Xpress service last, which US government customers started receiving from July.
Inmarsat, however, said revenue from its new high speed broadband services would be lower than expected over the next three years after the recent launch failure, Market Watch reported.
The company added, it did not believe geopolitical tensions with Russia would affect its planned launches from Proton, a Russian rocket.
Inmarsat satellites had also been used in the search for missing Malaysia Airlines flight 370.
Chief executive Rupert Pearce said, following the recent Porton launch failure, the launch of the companys' remaining GX satellites was likely to be delayed, but the company nevertheless remained very confident of the medium-term growth opportunities.
Inmarsat, whose competitors include Globalstar Inc and Iridium Satellite, hiked its interim dividend by 5 per cent to 18.68 cents.