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Yahsat reports robust first half results for 2024

 30 July 2024

Al Yah Satellite Communications Company PJSC (“Yahsat” or the “Group”), the UAE’s flagship satellite solutions provider listed on the Abu Dhabi Securities Exchange (”ADX”, under symbol: YAHSAT, ISIN: AEA007501017) announced today its consolidated financial results for the six month period ended 30 June 2024.

Whilst revenue marginally fell by 3% versus the prior year to AED 734 million [USD 200 million], EBITDA surged by 25% to AED 566 million [USD 154 million]. Net income also increased strongly by 62% to AED 269 million [USD 73 million]. On a normalised basis, adjusting for material, one-off items to allow for like-for-like comparison, EBITDA was stable versus the prior year at AED 462 million [USD 126 million]. Normalised Net income, which reached AED 175 million [USD 48 million], also remained stable versus the prior year notwithstanding the material impact of UAE corporate tax which was adopted by Yahsat for the first time this year.

This resilient performance was driven by 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 15%, maintaining robust EBITDA margins of more than 60% and 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 following the Thuraya 3 satellite anomaly in April 2024. Data Solutions, the Group’s smallest segment, offering satellite-based broadband data solutions, saw a slight reduction in revenue on lower subscriber numbers and associated equipment sales as the business strategically pivots towards higher margin markets.

Highlights for the period include:

·       Revenue of AED 734 million [USD 200 million], 3% lower year-on-year with growth achieved in the Infrastructure and Managed Solutions segments.

·       Normalised EBITDA of AED 462 million [USD 126 million], stable versus the prior year, with an 7% reduction in the normalised cost base resulting in an expanded margin of 63% (prior year 61%).

·       Normalised Net Income (profit) of AED 175 million [USD 48 million], stable versus the prior year, due to higher net finance income absorbing higher depreciation and the impact of the introduction of UAE corporate tax (9% rate); margins remained strong at 24% (prior year 23%).

·       Contracted future revenue of AED 24.5 billion [USD 6.7 billion], equivalent to approximately 15 times last-twelve-month revenue and only 2% lower versus the beginning of 2024.

·       Strong cash generation with Discretionary Free Cash Flow (“DFCF”) of AED 287 million [USD  78 million], slightly lower than the prior year but well ahead of expectation.

·       Strong balance sheet with a strong cash position of AED 1.5 billion [USD 398 million], Net Debt of only AED 115 million [USD 31 million] and AED 3.7 billion [USD 1 billion] expected in new advance payments to be received over the construction period of the Al Yah 4 and Al Yah 5 satellites. The Group also has access to an AED 1.1 billion [USD 300 million] bridge facility, which was partially drawn down in July, and enjoys long-term visibility and security of future cash flows up to 2043.

·       Guidance for revenue, EBITDA and cash flow is reiterated but expected CapEx has been revised lower for the full year to AED 1.5-1.6 billion [USD 400-430 million] from AED 1.7-1.8 billion [USD 470-500 million] following the signing of the full procurement contract for Al Yah 4 and Al Yah 5 with Airbus in June 2024.

Ali Al Hashemi, Group Chief Executive Officer of Yahsat, commented: “Yahsat has achieved another set of resilient results, demonstrating solid growth in our core government business, offsetting headwinds in our mobile satellite services segment.

“We 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 have signed, during the last quarter, the full procurement contract with Airbus for two new satellites, Al Yah 4 and Al Yah 5. Further, we continue to work towards a successful launch of the Thuraya 4 next generation satellite in the fourth quarter of this year, which will significantly upgrade Thuraya’s capabilities and product line for many years to come.

“Finally, we are looking forward to completing the merger with Bayanat in the second half of the year and are finalising plans for the successful integration of both companies. This merger will position the new combined entity – 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.”

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