Page 84 - SAMENA Trends - Oct-Nov 2023

SATELLITE UPDATES SAMENA TRENDS

Yahsat Contracted Future Revenues Surge to Record US$6.9 Billion

Government by means of an index-linked unchanged, whilst guidance for
long-term contract, continued to grow its discretionary free cash flow is increased to
year-on-year revenues by 1%. Managed a range of AED514-588 million from
Solutions, the group’s second largest AED477-550 million. Ali Al Hashemi, Group
segment, providing complete value-added Chief Executive Officer of Yahsat,
satellite communications solutions, commented: “The third quarter has been
primarily to the UAE Government and one of several historic achievements which
related entities, reported slightly lower reinforce the company’s future growth
revenues mainly due to an exceptionally trajectory. Our reported revenue growth for
strong comparative period although the nine-month period underpinned by one
remains well positioned to deliver full year of the strongest third quarters on record
revenues in line, or better, than prior year. has resulted in improved financial guidance
Data Solutions, offering satellite-based for 2023 and means that we are well
broadband data solutions, saw marginally positioned to record our strongest ever
lower revenues from fewer equipment performance for the full year. Our financial
sales but recorded a significant position with record low leverage has never
Al Yah Satellite Communications Company improvement in underlying operating been stronger and continues to support
PJSC (Yahsat), the UAE’s flagship satellite profitability. 9M witnessed strong cash our attractive progressive dividend policy.
solutions provider, has seen its contracted generation with discretionary free cash The construction of the Thuraya-4 NGS
future revenues surge to a record AED25.3 flow of AED627 million, 6% lower versus satellite remains on track for launch in
billion ($6.9 billion) or 15.7 times the last prior year due to a reimbursement of 2024 and entry into service in H1 2025,
twelve-month revenues. This was due to advance payments to the UAE Government with new advanced capabilities that will
the award of Yahsat’s largest ever (approx $75 million per annum starting allow us to offer additional applications to
government mandate valued at AED18.7 2023) previously received during the our customers. “Our largest ever contract
billion. Revenue and normalized EBITDA construction phase of the AY1 and AY2 award during the quarter – an AED18.7
grew 3% for the first nine months (9M) of satellites. This was largely offset by billion satellite capacity and managed
the year reached AED1.2 billion and improved collection of receivables. The services mandate from the UAE
AED713 million, respectively. Net income company has historically strong balance Government that includes the procurement
more than doubled whilst normalized net sheet with record negative net debt of of two new satellites, Al Yah 4 and Al Yah 5,
Income was in line versus the prior year more than AED583 million, total available has propelled our contracted future
period at AED274 million. Third quarter Q3 liquidity of AED2.6 billion and long-term revenues to an all-time high and will
revenues grew 8% versus the previous visibility of future cash flows up to 2043, support our core government business
year, which is the second highest on supporting Yahsat’s future investment in going forward whilst securing significant
record. Underpinning this impressive organic growth (Al Yah 4 and Al Yah 5) and predictable cashflows all the way out to
performance were historically strong opportunistic acquisitions, without 2043. “This is a very exciting time for
results in Mobility Solutions, the Thuraya impacting its attractive progressive Yahsat. These achievements continue to
business providing mobile satellite dividend policy. Yahsat is on track to grow differentiate our investment case amongst
services using L-band spectrum, which full year 2023 dividend by at least 2% to regionally-listed peers and within the
recorded revenue growth for the nine- 16.46 fils per share or AED402 million global satellite industry, which continues
month period of 22% and third quarter based on the last closing share price, this to witness significant transformation. We
growth of 81% versus the prior year, driven continues to imply an annualized dividend remain in a strong position to take
by higher equipment sales and service yield of well over 6%, amongst the highest advantage of value accretive opportunities,
revenues. Meanwhile, Infrastructure, the currently offered by UAE listed stocks. underpinned by our unique backlog of
group’s largest segment providing Guidance for full year revenue, EBITDA, and future revenues and our historically strong
communications capacity to the UAE cash capex and investments remain balance sheet.”

84 OCTOBER-NOVEMBER 2023