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Inmarsat, the satellite operator, on Tuesday said first-half profits jumped 11 per cent due to higher demand following the Asian tsunami and from maritime customers.
But the company, announcing its first results as a listed company since its flotation in June, said its land business was weaker than expected, with data revenues there falling 20 per cent.
Inmarsat, which operates satellites that enable voice and data services including telephony, fax, video, e-mail and internet access from anywhere in the world, said it expected the decline in land revenues to continue.
The company hopes to set that right in the next few years when its Broadband Global Area Network (BGAN) service, which will allow much faster data transfer speeds, is fully operational. Its launch is scheduled for the end of the year.
Laura Mills, analyst with Merrill Lynch, said the results were in line with expectations. “Inmarsat’s share price will likely continue to be driven by expectations of additional revenues from high-speed BGAN services, as well as the potential value of its spectrum assets,” she said.
The launch of BGAN in the fourth quarter will give mobile users voice and high-speed data capability and will use smaller terminals. Analysts say Inmarsat has the potential to be part of a coast-to-coast mobile service in the US, when it launches its second Inmarsat-4 satellite this year.
Earnings before interest, tax, depreciation and amortisation for the half-year ended June 30 rose 11 per cent to $171.8m on total revenues which rose
4 per cent to $253.6m.
More than half of Inmarsat’s revenues come from providing customers at sea with phone, fax and internet services but it also provides services where existing networks are under threat, such as after the tsunami and in war zones. Customers include the British Ministry of Defence, the BBC, CNN, British Airways and Shell.
Operating profit rose 43 per cent to $122.1m, affected by decreased depreciation costs for 2005 compared with 2004. Pre-tax profits more than doubled to $65.5m.
The company said the first interim dividend was expected to be 5.47 cents a share. Earnings per share were 13 cents.