Eutelsat Revises Revenue Guidance, Citing Delays in OneWeb’s LEO Activities

Eutelsat Group has revised its revenue guidance, anticipating revenues in the range of €1.25 billion to €1.3 billion, down from the previously projected range of €1.32 billion to €1.42 billion. The adjusted EBITDA is expected to be in the range of €650 million to €680 million, compared to the earlier estimate of €725 million to €825 million, Eutelsat said.
Eutelsat businessThis adjustment in guidance is attributed to various factors impacting the progress of OneWeb’s Low Earth Orbit (LEO) activities, which, although advancing well, are facing delays relative to the original roadmap.

Despite having all 100 percent of the satellites in place and a backlog of $1.1 billion at the end of the last quarter, the LEO activities are affected by delays in the availability of the ground network. Additionally, a revenue mix more oriented towards the sale of user terminals has impacted margins.

The ground network deployment is progressing towards a 90 percent completion rate in Q2 2024, according to Eutelsat. The company continues to witness strong momentum in the uptake of pre-signed commitments with major customers, affirming its belief that it is on track towards longer-term targets.

The delay in the ground network availability has repercussions on revenues, particularly in mobility and certain geographies where market access is pending. Eutelsat remains confident in the prospects of OneWeb and the potential of its unique combined Geostationary Earth Orbit (GEO) and LEO offer.

Despite these challenges, the legacy Eutelsat business is reportedly on track with expected performance, confirming a return to top-line growth for the fiscal year 2023-24. This growth is mainly attributed to the entry into service of satellites EUTELSAT 10B and KONNECT VHTS.

Management at Eutelsat remains optimistic about the future of OneWeb and the combined GEO-LEO offer, expressing confidence that as the constellation achieves full global operational coverage, an acceleration in revenues can be anticipated. The company is steadfast in its commitment to targeting a double-digit Compound Annual Growth Rate (CAGR) in revenues and adjusted EBITDA between fiscal year 2024 and fiscal year 2028.

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