Al Yah Satellite Communications Company (Yahsat) has unveiled its financial performance for the first half of 2023, revealing a stable revenue of AED 753 million (US$205 million). The company reported encouraging growth in EBITDA and net income, with increases of 3% and 5% respectively, standing at AED 460 million (US$125 million) and AED 175 million (US$48 million) on a normalized basis.
The company’s diverse business segments all contributed to this robust performance. Notably, Infrastructure, the largest segment of the Group, which caters to providing communications capacity to the UAE government, exhibited positive revenue growth. Similarly, Data Solutions, known for its satellite-based broadband data solutions, also played a pivotal role in driving revenue growth for the company.
Managed Solutions, the division that offers comprehensive value-added satellite communication solutions primarily to the UAE government and its affiliated entities, was able to maintain its revenues, showcasing resilience even in the face of a remarkably strong previous year.
One of the standout performers was Mobility Solutions, particularly the Thuraya business arm. This segment, specializing in mobile satellite services through L-band spectrum, experienced an impressive 12% growth in the second quarter when compared to the previous year. This surge was attributed to increased equipment sales. Industry experts anticipate this upward trend to persist through the third quarter, potentially leading to substantial revenue growth by the end of the year.
Ali Al Hashemi, the Group Chief Executive Officer of Yahsat, expressed his optimism about the company’s performance, stating, “Yahsat continues to enhance its operational efficiency and profitability. Our focus remains on bolstering both our core government business and commercial segments, while simultaneously implementing effective cost management strategies across the organization.”
Al Hashemi went on to highlight the company’s ongoing projects and expansion plans. The procurement program for Thuraya-4 NGS satellite is on track for launch in the first half of 2024. Furthermore, Yahsat has inked an Authorisation-to-Proceed (ATP) agreement with Airbus, a long-standing partner, to initiate preliminary activities for acquiring the Al Yah 4 and Al Yah 5 satellites.
In parallel, advanced negotiations are underway with the UAE government for a substantial long-term contract. If secured, this contract would significantly bolster Yahsat’s backlog of contracted revenues, extending well beyond the year 2040.
Al Hashemi also elaborated on the company’s diversification efforts. Yahsat is in the process of establishing a formal partnership with Bayanat to offer Earth Observation (EO) capabilities. The partnership’s initial phase will introduce synthetic aperture radar (SAR) technology, enabling higher resolution data collection compared to traditional sensors. This venture aims to create a constellation of five satellites, with the first slated for launch in the first half of 2024. This development represents a strategic move to expand Yahsat’s portfolio from fixed and mobile satellite communication services in GEO orbits to encompass Earth observation services in LEO orbits.
The CEO also pointed out the prevailing dynamics in the satellite industry. With substantial investments and evolving business models, the industry is undergoing consolidation and witnessing the emergence of stronger players. Yahsat, fortified by its promising backlog of future revenues and a robust balance sheet, stands well-positioned to capitalize on these industry shifts.
In conclusion, Yahsat’s steady revenue performance in the first half of 2023, along with its strategic expansion initiatives, partnerships, and negotiation efforts, paint a promising trajectory for the company’s future growth. As the satellite industry continues to evolve, Yahsat’s adaptability and proactive approach position it as a significant player in the changing landscape.
