Inmarsat (LSE: ISAT), the provider of global mobile satellite communications services (MMS), released its results to 30 June 2013 showing adjusted total revenues up 1% to $635.2m and adjusted profit before tax increasing 6% to $183.5m. Second-quarter revenue growth was driven by Global MMS revenues rising 4% to $195.9m although this was tempered by a fall in ‘Solutions’ revenues of 5% to $195.1m. Encouragingly, the interim dividend rose 5% to 17.79 cents per share.
Strong subscriber growth was reported with 4,140 new FleetBroadband customers and a strong take-up of the XpressLink and SwiftBroadband services. Additionally, the total number of active terminals rose by 10% with land mobile terminals leading the way. Inmarsat were also pleased with the launch of the Alphasat satellite, which will enhance the capacity, power and coverage of the network for the EMEA region.
Rupert Pearce, Inmarsat’s Chief Executive Officer, said,
“During the second quarter, subscriber growth for key MSS services and the take-up of package-based maritime services contributed to a solid performance for Inmarsat Global MSS revenues. As a result we are now on track to achieve the top of our two-year target range for wholesale MSS revenue growth.
“Within our Inmarsat Solutions business, while the contracting environment for our US Government business remains challenging, the revenue results for our other business units have remained positive and, with tight cost control across the group, we are satisfied with the overall results for the quarter.”
One sour note for Inmarsat is the continued poor performance of the Inmarsat Solutions business, which has significantly deteriorated as a result of US defence spending cuts. It is expected that this revenue stream will decline further and more contract losses will be seen.
Overall, Inmarsat remains on course to meet expectations and its investments point to a bright future and possible growth opportunities. The market certainly agreed this morning with shares trading 7% higher at 722p.
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> Barry does not own shares in Inmarsat.
