Abu Dhabi's Yahsat fourth-quarter profit surges on higher revenue

Satellite communications company plans to spend $190m in capital expenditure this year

Yahsat’s third satellite, Al Yah 3, was launched in January last year. Courtesy Mubadala Investment Company

Al Yah Satellite Communications, or Yahsat, said fourth-quarter profit surged 54 per cent on higher revenue and lower costs.

Net profit attributable to the shareholders in the three-month period to the end of December increased to $26.5 million from the same period a year earlier, the company said in a regulatory filing to the Abu Dhabi Securities Exchange on Tuesday.

Revenue during the period increased 7.9 per cent to $123.3m, while costs decreased.

"We were able to leverage the resurgence in government projects supported by the economic recovery and establish a raft of new partnerships with key national stakeholders," said Ali Al Hashemi, group chief executive of Yahsat.

"We also continued to diversify our customer base, in both government and commercial segments, including penetration into key industrial verticals. This momentum positions us well for success in 2022, with approximately 70 per cent of our projected revenues for the year already secured.”

On an annual basis, net profit increased 1.2 per cent to $69.8m from 2020. Revenue last year was relatively unchanged at $407.5m.

Founded in 2007, Yahsat operates in more than 150 countries across five continents. Its five satellites reach more than two thirds of the world’s population. A sixth satellite is expected to launch in the second half of 2023 and begin commercial operations 12 months later.

In October, Yahsat was appointed by the UAE government to conduct a detailed assessment of two new planned satellite launches by 2026, a move that would help it "further bolster its contracted future revenues and secure its longer-term financial outlook", the company said.

Yahsat's contracted future revenues rose 35 per cent to reach $2bn, boosted by a 15-year T4-Next Generation Satellite Capacity Services Agreement with a government customer that added $700m to its backlog.

Yahsat’s Mobility Solutions business (Thuraya) also signed a three-year distribution agreement worth approximately $86m, adding to the group’s contracted future revenues.

Last year, the Abu Dhabi company also formed a new joint venture company called Star Technologies to manufacture hardware and software for satellite parts.

Yahsat plans to spend $190m in capital expenditure this year, with the bulk of it expected to be related to the T4-NGS programme. The project will be fully funded by existing debt facilities and an advance payment of $150m from the end customer of the 15-year T4-NGS Managed Capacity Services Agreement.

"The satellite industry is set for growth both nationally and internationally and we are well positioned to capture an increasing share of this growing market. We are on track to grow in 2022, to achieve our strategic objectives and to increase value for our customers, our shareholders and the global space industry,” said Mr Al Hashemi.

Yahsat, a unit of Mubadala Investment Company, raised about $731m from its initial public offering last July.

It sold 975.9 million shares, or 40 per cent of equity, through the IPO, which was several times oversubscribed, with significant demand from both qualified institutional and retail investors in the UAE, Yahsat said at the time.