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UPDATE 1-Inmarsat's profit hurt by LightSquared failure
March 7, 2013 / 11:26 AM / 5 years ago

UPDATE 1-Inmarsat's profit hurt by LightSquared failure

* FY pretax profit down 20 pct

* Revenue excluding LightSquared up 6 pct

* Expects growth in core business in 2013

By Paul Sandle

LONDON, March 7 (Reuters) - Satellite communications provider Inmarsat posted a 20 percent fall in 2012 pretax profit on Thursday reflecting suspended payments from LightSquared, a plan to create a new North American mobile network.

The company, which provides services to ships, aircraft and military and aid agencies, posted a pretax profit of $294 million.

It reached an agreement last year with LightSquared, which is backed by Philip Falcone’s Harbinger Capital Partners, to suspend payments until 2014.

Excluding LightSquared, which had rented some of Inmarsat’s airwaves, revenue rose 6 percent to $1.28 billion, the company said, helped by increased uptake of its newer broadband terminals.

Chief Executive Rupert Pearce said the company saw good progress in its core maritime business, where revenue grew 16 percent.

Growth is coming from data as mariners increasingly expect broadband coverage on ships, he said, which bodes well for the launch of the first satellite for its Global Xpress high-capacity superfast network later this year.

Aviation also performed well, Pearce said, particularly commercial flights, where Inmarsat provides in-flight communications for airlines including Emirates.

“More than 250 aircraft are now connected, and with 1,000 aircraft in back log, aero passenger connectivity is at the tipping point,” he said. “Passengers are beginning to demand a connected aircraft when they fly.”

The company said it expected the revenue growth to outpace the expected loss of revenue from services it provides to troops in the process of withdrawing from Afghanistan.

“We remain confident that we will report net revenue growth in 2013 in our (core) Inmarsat Global MSS business,” it said.

Inmarsat shares, up almost 40 percent from a year ago, were trading at 656.5 pence as of 1120 GMT on Thursday, down 1.35 percent.

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