It’s not been a good month for European satellite operators. Recent weeks have seen Paris-based Eutelsat suffer negative comments and a much-depressed share price. Now it is Luxembourg’s SES which is hurting.Ratings agency Moody’s cut its outlook on SES to “negative” (from “stable”) and that the operator’s long-term debt (rated Baa3) would be “under stress” starting later in 2025. Moody’s is worried about competition and competition forcing capacity lease prices down. Not helping is the upcoming costs of acquiring arch-rival Intelsat for $3.1 billion in cash, plus absorbing Intelsat’s $1.9 billion of debt.“The outlook change to negative reflects the increased risk in terms of operating performance and deleveraging path of the combined SES and Intelsat entity, owning to growth competition and higher innovation in the satellite industry,” said Ernesto Bisagno, a Moody’s VP and its lead satellite analyst.SES put out a statement, saying it expects Full Year 2024 Results to be better-than-expected with Revenue at the top end of the financial outlook range (€1,940-2,000 million) and Adjusted EBITDA above the outlook range (€950-1,000 million).SES added: “The proposed acquisition of Intelsat is on track to close during H2/2025. SES expects to reconfirm all financial targets for the combined company (pre-IRIS2) published in the transaction announcement in April 2024, including low- to mid-single digit average annual growth in Revenue for 2024-2028E, mid-single digit average annual growth in Adjusted EBITDA for 2024-2028E, and strong Free Cash Flow generation. SES remains committed to maintaining Investment Grade metrics.”SES will issue its full-year numbers next week on February 26th.
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