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Inmarsat Plc Reports Preliminary Full Year Results 2011

Stocks in this article: ISAT

LONDON, March 6, 2012 /PRNewswire/ --

Inmarsat plc (LSE: ISAT.L), the leading provider of global mobile satellite communications services, today reported consolidated preliminary financial results for the year ended 31 December 2011.

Inmarsat plc - Full Year 2011 Highlights

•    Total revenue $1,409m up 20% (2010: $1,172m)

•    EBITDA $854m up 23% (2010: $696m)

•    Profit before tax $367m up 10% (2010: $334m)

•    Strong growth in FleetBroadband ARPUs

•    IsatPhone Pro subscribers exceed 50,000 to date

•    Final dividend of 24.96 cents US$ up 10%

•    $270m of cash returned to shareholders

Inmarsat Group Limited - Fourth Quarter 2011 Highlights

•    Total revenue $362m up 24% (2010: $292m)

•    Total Inmarsat Global MSS revenue$241m up 23%(2010: $195m)

•    EBITDA $203m up 18% (2010: $172m)

Rupert Pearce, Chief Executive Officer, said, "We are pleased with the progress we are making in MSS subscriber growth and in the development of our next generation Global Xpress satellite services.  As a result, we are confident in both the on-going cash flow generation in our core MSS business and in the potential for significantly renewed revenue growth once our Global Xpress services become available from late next year. We expect our 2012 revenue growth trends in our core MSS business to improve on 2011."

Inmarsat plc    

    (US$ in millions)                              2011       2010    Increase
    Inmarsat Global                               958.4      764.1    25.4%
    Inmarsat Solutions                            758.2      716.8     5.8%
                                                1,716.6    1,480.9    15.9%
    Intercompany eliminations and adjustments    (308.1)    (309.3)    
    Total revenue                               1,408.5    1,171.6    20.2%
     Inmarsat Global
    (US$ in millions)                        2011     2010   Increase/ (decrease)
      Maritime voice services                90.2     98.1       (8.1%)
      Maritime data services                268.7    262.5        2.4%
    Total maritime sector                   358.9    360.6       (0.5%)
      Land mobile voice services              7.7      7.3        5.5%
      Land mobile data services             144.0    146.4       (1.6%)
    Total land mobile sector                151.7    153.7       (1.3%)
      Aviation sector                        99.5    101.0       (1.5%)
      Leasing                               110.2    111.7       (1.3%)
    Total mobile satellite services         720.3    727.0       (0.9%)
      Other income                          238.1     37.1    
    Total revenue                           958.4    764.1       25.4%


Revenue from our Cooperation Agreement with LightSquared, recorded within Other income, was the primary driver of overall revenue growth for 2011.  Recent regulatory developments in the United States have created significant uncertainty over the viability of LightSquared's ATC business model and a payment from LightSquared that was due in February 2012 under the Cooperation Agreement was not received by us and remains outstanding.  Inmarsat has entered into discussions with LightSquared, but cannot provide any assurance that the outstanding payment or further payments in relation to the Cooperation Agreement will now be received.  The revenue generation of Inmarsat's core MSS and Inmarsat Solutions businesses remains unaffected by the LightSquared developments.  


In the maritime sector, while our 2011 revenue was impacted by continuing customer migration to our FleetBroadband service, we saw strong growth in customer usage as the year progressed. Customer migration has impacted service revenue because FleetBroadband pricing is typically lower than the older services being replaced.  In addition, voice to email substitution and, to a lesser extent, competition from alternative providers, contributed to lower than expected revenue growth in 2011.  However, activations of new FleetBroadband terminals have remained strong throughout the year and we added 9,818 terminals during the year, of which 2,276 were activated in the fourth quarter. Average revenue per user ("ARPU") for FleetBroadband has also grown strongly during the year and exceeded $600 per month in the fourth quarter for our FleetBroadband 250 and 500 terminals.

Consistent growth in FleetBroadband ARPUs continues to support our view that maritime customers are increasing their usage with FleetBroadband and that during 2012 this trend will offset the revenue impact of service migration.  In addition, we are implementing a number of pricing initiatives to further incentivise customer migration to FleetBroadband, the take up of fixed-term value-added pricing plans, and to improve the yield from certain older services.  Some of these initiatives have already taken effect in 2012, while others will be brought in later in the year after notice periods have expired.  

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