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Yahsat reports strong first quarter results for 2024

14 May 2024

Al Yah Satellite Communications Company PJSC announced today its consolidated financial results for the three months ended 31 March 2024. 

Revenue grew 1% for the period versus the prior year to a record AED 371 million [USD 101 million]. EBITDA grew 58% to AED 352 million [USD 96 million] and net income almost doubled to AED 194 million [USD 53 million]. On a normalised basis, adjusting for material, one-off items to allow like-for-like comparison, EBITDA grew 7% to reach AED 247 million [USD 67 million] and net income fell 8% to AED 99 million [USD 27 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 1%. 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% 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 AED 371 million [USD 101 million], up 1% year-on-year with growth across the Infrastructure and Managed Solutions segments.

Normalised EBITDA of AED 247 million [USD 67 million], up 7% year-on-year, with a double-digit reduction in the normalised cost base resulting in an expanded margin of 67% (prior year 63%).

Normalised Net Income (profit) of AED 99 million [USD 27 million], down 8% versus the prior year period, due to the introduction of UAE corporate tax (9% rate); margins remained strong at 27% (prior year 29%).

Contracted future revenue of AED 24.7 billion [USD 6.7 billion], equivalent to approximately 15 times last-twelve-month revenue and only 1% lower versus year end 2023.

Strong cash generation with Discretionary Free Cash Flow (“DFCF”) of AED 252 million [USD 69 million], more than double the prior year figure driven by improved collection of receivables.

Historically strong balance sheet with an improved cash position of AED 2.3 billion [USD 615 million], negative Net Debt of AED 596 million [USD 162 million], AED 3.7 billion [USD 1 billion] expected in new advance payments, access to a USD 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 AED 1.5-1.6 billion [USD 415-435 million] from AED 1.6-1.7 billion [USD 440-460 million].

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.