An 81 percent surge in Mobility Solutions revenue for the third quarter, and 22 percent increase in the nine months of 2023, has led to 3 percent increase in both revenue and normalised EBITDA for Al Yah Satellite Communications Company (Yahsat).
The UAE’s flagship satellite solutions provider, listed on the Abu Dhabi Securities Exchange (ADX), announced its consolidated financial results for the nine months ending 30 September 2023. Revenue reached AED1.2 billion ($323 million) and normalised EBITDA was up to AED713 million ($194 million). Net income has more than doubled whilst normalised net income was in line versus the prior year period at AED274 million ($75 million).
For the third quarter, Yahsat revenue grew to $117 million, up from $108 million in the same quarter last year.
Contracted future revenue for the group was AED25.3 billion ($6.9 billion), which is equivalent to 15.7 times last-12-month revenue. The figure has grown multi-fold times versus year-end 2022, when it was AED7.3 billion ($2 billion).
Yahsat’s mega satellite contract
Yahsat will receive AED3.7 billion ($1 billion) in advance for its highest-ever mandate awarded by the UAE Government during the quarter worth AED18.7 billion ($5.1 billion). This is for satellite capacity and managed services.
The company’s largest-ever contract award includes the procurement of two new satellites – Al Yah 4 and Al Yah 5 – and has propelled contracted future revenues to an all-time high and secures predictable cashflows until 2043.
Mobility Solutions, which is the Thuraya business providing mobile satellite services using L-band spectrum, recorded impressive revenue growth driven by higher equipment sales and service revenues.
Revenues for Infrastructure, the group’s largest segment providing communications capacity to the UAE Government using an index-linked long-term contract, grew 1 percent year-on-year.
Managed Solutions, the group’s second-largest segment providing complete value-added satellite communications solutions, reported slightly lower revenues mainly due to an exceptionally strong comparative period.
Yahsat’s achievements drive growth trajectory
Ali Al Hashemi, Group Chief Executive Officer, Yahsat, commented: “The third quarter has been one of several historic achievements that reinforce the company’s future growth trajectory.
“Our reported revenue growth for the nine months, underpinned by one of the strongest third quarters on record, has resulted in improved financial guidance for 2023 and means that we are well positioned to record our strongest ever performance for the full year.
“Our financial position with record low leverage has never been stronger and continues to support our attractive progressive dividend policy.”
The strong balance sheet with record negative net debt of more than AED583 million ($159 million), total available liquidity of AED2.6 billion ($719 million) and long-term visibility of future cash flows up to 2043, supports Yahsat’s future investment in organic growth and opportunistic acquisitions, without impacting its attractive progressive dividend policy.
Yahsat announced it was on track to grow full-year 2023 dividend by at least 2 percent to 16.46 fils per share, or AED402 million ($109 million), based on the last closing share price. That’s an annualised dividend yield of over 6 percent, amongst the highest currently offered by UAE-listed stocks.
Yahsat said the construction of its Thuraya-4 NGS satellite remains on track for launch in 2024 and entry into service in H1 2025, with new advanced capabilities that will allow the company to offer additional applications to customers.
“This is a very exciting time for Yahsat. These achievements continue to differentiate our investment case amongst regionally-listed peers and within the global satellite industry, which continues to witness significant transformation. We remain in a strong position to take advantage of value-accretive opportunities, underpinned by our unique backlog of future revenues and our historically strong balance sheet,” Al Hashemi concluded.
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