Eutelsat sales fall as broadcast revenue slips, though mobile business grows

By Lina Golovnya

(Reuters) -Eutelsat, the world's third-biggest satellite operator by revenue, on Thursday reported a decline in third-quarter sales as broadcast earnings fell, although the company saw growth in its fixed broadband and mobile connectivity divisions.

It said quarterly revenue fell 5.2% to 272 million euros ($299 million), in line with market expectations, driven by a 10.6% drop in its main broadcast division that was hit by sanctions against its Russian and Iranian channels.

The fixed broadband unit's like-for-like sales rose 7.3% to 18.5 million euros, while the mobile connectivity division saw growth of 23% to 26.9 million euros.

"We are seeing (mobile connectivity business) starting up now with the flat panels and the maritime segment kicking in very strongly," CEO Eva Berneke told analysts in a call, saying this should result in "much more mobile revenue" in the latter half of calendar 2023.

The group confirmed its financial targets for the full year ending on June 30.

In February, the France-based group said it planned to focus on areas such as mobile connectivity, aided by its upcoming merger with Britain's OneWeb.

The OneWeb merger, which was agreed last July, will combine Eutelsat's geostationary satellite fleet with OneWeb's low-earth orbit constellation to offer fast internet services by satellite.

Berneke said the deal was expected to close in the third quarter of the 2023 calendar year, though the exact timing would depend on regulatory approvals.

Eutelsat predicted another step-up in sales once its new inorbit assets enter into service in the second half of 2023 calendar year, which should support its return to growth in fiscal 2023/24.

Its shares were down around 0.5% at 1147 GMT.

($1 = 0.9084 euros)

(Reporting by Lina Golovnya in Gdansk; editing by Milla Nissi and Susan Fenton)