Satellite firm SES's revenue soars on airline contracts, shares follow
SES Reports Robust Financial Performance Driven by Aviation Sector
By Leo Marchandon and Matthieu Huchet
Revenue and Earnings Exceed Expectations
May 12 (Reuters) - Satellite operator SES reported an 80% jump in its constant-currency sales on Tuesday, bolstered by demand for inflight connectivity from major airlines, which sent the company's Paris-listed shares to their highest price since July 2022.
Revenue surged to 847 million euros ($996 million) in the first quarter, beating analysts' consensus of 829 million euros provided on SES's website. Adjusted core earnings also topped expectations at 404 million euros.
SES booked 306 million euros worth of new contracts and renewals, contributing to a gross backlog of 6.2 billion euros, and reaffirmed its full-year guidance.
Aviation Sector Leads Growth
Aviation was the standout performer, as SES secured business for more than 40 long-haul aircraft for Japan Airlines and a contract with Saudi Airlines.
There was also progress with Boeing on a factory line-fit solution for all its aircraft models, alongside connectivity deployments for carriers including American Airlines and Air Canada.
SES's Paris-listed shares were up 7% by 1100 GMT, leading gains on the SBF 120 index of Paris' most traded stocks.
Regional Performance and Strategic Initiatives
Strong Europe Offsets US Weakness
The Luxembourg-based company is seeking to benefit from Europe's push for sovereign space infrastructure and rising global demand, despite challenges posed by U.S. government budget issues and continued pressure on its legacy businesses.
Secure Communications and Next-Generation Constellation
SES has seen higher demand for secure communications capacity, driven partly by the war in the Middle East, finance chief Lisa Pataki told analysts in a call.
She added the company was "well positioned to capture this potential uplift" with the rollout of its next-generation constellation.
European Gains and US Challenges
European gains offset a weaker U.S. performance, primarily caused by delays tied to the 2025 government shutdown and measures by the Department of Government Efficiency. These issues are expected to be resolved later this year, Pataki said.
Progress in European Space Initiatives
CEO Adel Al-Saleh also highlighted progress in the European Union's IRIS² programme, a sovereign space connectivity initiative, noting that the first milestone phase was nearing completion.
SES also extended its EGNOS GEO-1 navigation satellite agreement with the EU Agency for the Space Programme through 2030.
($1 = 0.8508 euros)
(Reporting by Leo Marchandon and Mathieu Huchet in Gdansk, editing by Milla Nissi-Prussak)
