Normalised EBITDA grew 3% versus prior year to AED 460 million and Normalised Net Income 5% to AED 175 million delivering improved margins
Revenue for the first half of the year was stable at AED 753 million [USD 205 million] whilst EBITDA and net income increased, on a normalised basis, by 3% versus the prior year to AED 460 million [USD 125 million] and 5% to AED 175 million [USD 48 million], respectively.
The Group delivered revenue growth in Infrastructure, the Group’s largest segment providing communications capacity to the UAE government, and Data Solutions, offering satellite-based broadband data solutions. Managed Solutions, providing complete value-added satellite communications solutions primarily to the UAE government and related entities, maintained revenues versus an exceptionally strong prior year. Mobility Solutions, the Thuraya business providing mobile satellite services using L-band spectrum, recorded strong double-digit growth in the second quarter of 12% versus the prior year, driven by higher equipment sales, a trend that is expected to continue into the third quarter and help achieve revenue growth for that segment by the end of the year.
Highlights for the period include:
- Revenue of AED 753 million [USD 205 million], stable year-on-year.
- Normalised EBITDA of AED 460 million [USD 125 million], up 3% year-on-year, delivering a superior margin of 61% (prior year 59%).
- Normalised Net Income (profit) of AED 175 million [USD 48 million], up 5% year-on-year, generating an improved margin of 23% (prior year 22%).
- Contracted future revenue of AED 7.0 billion [USD 1.9 billion], stable versus end of Q1 2023 and equivalent to 4.4 times last-twelve-month revenue.
- Improved cash generation with Discretionary Free Cash Flow of AED 296 million (USD 82 million), up 34% versus prior year.
- Historically strong balance sheet with negative Net Debt of more than AED 454 million [USD 125 million], total available liquidity of AED 2.3 billion [USD 686 million] and long-term visibility of future cash flows, supports Yahsat’s future investment in organic growth (Al Yah 4 and Al Yah 5) and opportunistic acquisitions, without impacting its attractive progressive dividend policy.
- Positive net finance income benefiting from higher interest rates on short-term deposits versus prior year.
- On track to grow full year 2023 dividend by at least 2% to 16.46 fils [4.48 US cents] per share or AED 402 million [USD 109 million] – based on the last closing share price, this implies an annualised dividend yield of over 6%, amongst the highest offered by UAE listed stocks.
- Guidance for full year revenue, EBITDA, and Discretionary Free Cash Flow remains unchanged, whilst guidance for cash capex and investments is increased to a range of AED 643-716 million [USD 175-195 million] from AED 569-643 million [USD 155-175 million], to reflect the commencement of the Al Yah 4 and Al Yah 5 satellite procurement programme.
Ali Al Hashemi, Group Chief Executive Officer of Yahsat, commented: “Yahsat continues to improve its business operations and profitability, and we remain focused on growing both our core government business and commercial segments, whilst controlling and optimising costs across the Group.
“In addition to completing the Thuraya-4 NGS satellite procurement programme, which remains on track to be launched in the first half of 2024, we have signed an Authorization-to-Proceed (ATP) with Airbus, a long-time partner of Yahsat, to commence initial activities relating to the procurement of the Al Yah 4 and Al Yah 5 satellites. In parallel, we are in advanced negotiations with the UAE government to secure a long-term contract that would significantly increase and extend our backlog of contracted revenues beyond 2040.
“We have also commenced work on establishing a formal partnership with Bayanat to offer Earth Observation (EO) capabilities using, in the first phase, synthetic aperture radar (SAR) technology, which provides higher resolution data than conventional sensors. This partnership aims to develop a constellation of five satellites, with the first satellite expected to be launched in the first half of 2024, which will further diversify our current portfolio of fixed and mobile satellite communication services from GEO orbits and expand it to include Earth observation services from LEO orbits.
“The satellite industry continues to witness substantial investments and the development of new business models. Together, these forces are driving industry consolidation and the necessary emergence of larger and stronger players. Yahsat remains in a strong position to take advantage of these developments, underpinned by our unique backlog of future revenues and our historically strong and robust balance sheet.”
The full set of first half financial disclosures, including a more detailed Management Discussion & Analysis report that clearly defines capitalised terms used in this press release, can be found within the Investor Relations section on Yahsat’s website.