UPDATE 2-SES sees faster growth after satellite problems in 2012

Fri Feb 22, 2013 10:37am EST

* Revenue, core profit growth in 2012 below SES's forecasts

* Hit from satellite delay, malfunction, German analogue TV

* Sees 2013 growth of revenue, core profit of 4-5 pct

* Shares go from weakest in FTSEurofirst 300 to record high (Updates after shares hit record high)

BRUSSELS, Feb 22 (Reuters) - Satellite operator SES forecast higher growth this year and next after 2012 results took a hit from Germany's switch-off of analogue broadcasting and problems with satellites.

SES said on Friday that this year revenue and core profit would increase by between 4 and 5 percent based on constant exchange rates, more than double the rates of last year.

Renewed contracts from the likes of Canal+ and BBC helped build a record order backlog. SES also said capital expenditure should fall from 2014 due to reduced replacement of satellites.

The company, which sells transmission capacity to the likes of BSkyB, Echostar and India's Dish TV, said revenue in 2012 grew by 1.5 percent and core profit by 1.6 percent, missing its own targets of 2 and 2.5 percent.

SES shares initially fell as much as 3 percent, making them the worst performers in the FTSEurofirst 300 index. However, by early afternoon they had hit an all-time high of 24.10 euros, as the market focused more on growth prospects.

Jefferies analyst Giles Thorne said in a note that the 7.5 billion euro ($9.9 billion) record backlog gave greater confidence in future revenue.

ING analyst Emmanuel Carlier, who rates the company a buy with a 24 euro price target, saw the earlier dip as a buying opportunity. "Long term the fundamentals remain strong."

5,300 TV CHANNELS

SES, which broadcasts 5,300 television channels from 52 satellites, lost 108 million euros ($142.80 million) in Germany in 2012, given the end of analogue satellite transmission there in April.

It also took a 13 million euro hit due to a three-week delay in launching satellite SES-5 for Europe, Middle East and Africa and a malfunction in solar powering of satellite AMC-16 over North America, which reduced transmission capacity.

SES said the German switch-off of analogue broadcasts would mean an impact of about 40 million euros this year, but satellite launches in 2012 and 2013 should see growth steadily accelerating and higher capacity utilisation.

SES reiterated its three-year 2012-2014 forecasts for revenue and core profit growth of about 4.5 percent. Average annual capital expenditure should fall to a maximum of 450 million euros in 2014-2017 from 700 million in 2011-2013.

SES has suffered limited pain since the global financial crisis began in 2008 because its revenue is mostly from steady rental of satellite capacity as thrifty consumers go out less and spend more time at home watching television.

It is one of the few companies that can point to strength in western Europe.

Operators have mainly achieved growth by expanding in digital television in emerging markets, notably India and Latin America, and from Europe's adoption of high-definition broadcasting. ($1=0.7563 euros) (Reporting by Philip Blenkinsop; Editing by Jason Neely and Stephen Powell)

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