The UAE satellite operator, Yahsat, has won a new 17-year capacity and managed services mandate with the government. The deal will replace contracts that expire in 2026 and fund the launch of two new geostationary satellites from Airbus, Al Yah 4 and Al Yah 5, for launch in 2027 and 2028.
Q3 2023 Results
Al Yah Satellite Communications Company PJSC (Yahsat) reported revenue growth of 3% and normalised EBITDA more than doubled in the nine months to September. The Abu Dhabi-listed satellite operator also maintained a strong margin and healthy cash flows.
The Group was awarded the highest ever mandate by the UAE Government during the quarter worth AED 18.7 billion for satellite capacity and managed services of which AED 3.7 billion will be received in advance. This, alongside a historically robust balance sheet with negative net debt and strong liquidity provides the foundation for future investment in organic growth and opportunistic acquisitions without impacting its attractive progressive dividend policy.
Revenue Growth
The company’s revenue stream remained strong with contracted future revenue increasing by a multi-fold compared to year-end 2022. This was driven by the highest-ever mandate awarded by the UAE government for satellite capacity and managed services worth AED 18.7 billion, of which AED 3.7 billion will be received in advance.
The Mobility Solutions arm, through ‘Thuraya’ – Yahsat’s narrow-band L-band mobile satellite solutions brand, saw impressive growth with revenues up 22% in the nine months and 81% in Q3. Infrastructure and Managed Solutions both maintained revenues on a normalised basis.
EBITDA
The UAE-based satellite operator’s profitability continues to be supported by its infrastructure business. Revenue and normalised Ebitda rose 3 per cent year-on-year during the period to reach AED1.2 billion and AED713 million respectively.
Yahsat’s recent government contracts have strengthened the company’s future revenue growth prospects. This has particularly been reflected in its mobility solutions arm Thuraya, which experienced a remarkable 22% revenue growth and 81% year-on-year growth during the nine months.
Profitability
Al Yah Satellite Communications Company PJSC (Yahsat) announced consolidated financial results for the third quarter of 2023. Revenue and normalised EBITDA grew 4% and 35% compared to the same period last year.
Yahsat’s mobility solutions arm, Thuraya, has recently secured a series of significant government contracts that will drive future revenue growth for the Group. This is in addition to its established commercial business. The Group’s fleet of 5 satellites reach 80% of the world’s population.
Mobility Solutions
The UAE-based satellite communications company reported robust 3% growth in both revenue and normalised EBITDA for the nine months ending September 2023. Net income more than doubled whilst normalised net income remained in line with the prior year period.
The Group’s Mobility Solutions business, through its Thuraya-branded L-band mobile satellite services, achieved solid growth versus the prior year boosted by higher equipment sales and service revenues.
The Group has been awarded the highest-ever mandate from the UAE Government for satellite capacity and managed services. This new contract will replace two current agreements that come to an end in November and December 2026.
Infrastructure
Yahsat’s fleet of five satellites reaches more than 80 percent of the world’s population, providing broadband, broadcasting, backhaul and mobility solutions. The company capitalized on its strong momentum in the data and mobility solutions segments in the fourth quarter of 2021, achieving significant new awards that have increased contracted future revenues to nearly 70% of its minimum guidance for 2022.
The Group’s government solutions arm also secured a 17-year managed services mandate from the UAE Government that combines capacity, operations and maintenance with related technology management support.
Managed Solutions
The Group’s Managed Solutions segment continued to perform well, achieving record revenue growth. This was driven by strong performance across Thuraya Government Comms, which includes end-to-end managed satellite communications services and ICT, and Thuraya Xpress for maritime customers.
The procurement of the Thuraya-4 NGS satellite also strengthens our positioning in this important market, with its capacity to deliver strategic earth observation capabilities including synthetic aperture radar (SAR) and optical imagery satellite capabilities.
Data Solutions
Yahsat’s future outlook is bright as it continues to grow its global data solutions business. The company’s new Thuraya 4 Next Generation satellite (T4-NGS) will provide global mobile data services and bolster its mobility solutions portfolio with advanced cellular IoT and direct-to-device capabilities.
Yahsat also signed a number of new managed solutions contracts to maintain momentum, with over 70% of its 2022 projected revenues already contracted. This includes a multi-year contract to provide managed capacity services to the UAE Government.
Future Outlook
Yahsat’s ability to secure these lucrative government contracts bolsters its future revenue forecasts and reinforces its position as a leading satellite communications company. In particular, the Group’s mobility solutions arm, Thuraya, continued to achieve impressive growth with a record 22% increase in revenue over nine months and 81% year-on-year during the period July to September.
Similarly, the construction of AY4 and AY5 further boosts contracted future revenue, adding over Dh25.7 billion to the Group’s backlog. This milestone reflects the UAE Government’s trust in Yahsat’s capabilities, expertise, reliability and capacity to deliver world-class services.