(Reuters) - Luxembourg-based satellite company SES cut its 2020 outlook on Wednesday to reflect a more prudent view of its Video division, triggering volatile moves in its share price.
The company plans in 2020 to shift its revenue stream from currently two thirds generated from Video to less than 60 percent from Video and above 40 percent from Networks, aiming for a 50-50 breakdown eventually.
SES kept its 2020 guidance for its Networks division, but said its Video business would face challenging market conditions.
It reported full-year 2018 core profit slightly above expectations.
SES’s shares tumbled nearly 10 percent on opening after the results but reversed course and were up 0.6 percent at 17.95 euros by 0810 GMT.
In 2020 it said it now expects total revenue of 2.06 billion euros ($2.3 billion)-2.16 billion euros in the 2020 calendar year and 1.26 billion-1.34 billion euros for group EBITDA.
Previously it had forecast revenue 2.11 billion-2.21 billion and EBITDA of 1.34 billion-1.41 billion.
For 2019, the company said it sees EBITDA within the range of 1.22 billion-1.27 billion euros on revenue of 1.98 billion-2.04 billion euros.
SES reported 2018 earnings before interest, tax, depreciation and amortization (EBITDA) of 1.26 billion euros, down 2.6 percent at constant exchange rates, but that topped the 1.25 billion euros expected by analysts in a consensus compiled for the company.
“2018 was a good year for SES. We have delivered top-line growth, exceeding the top end of our revenue outlook on the back of an exceptionally strong year for SES Networks,” Chief Executive Steve Collar said in a statement.
SES Networks recorded a 15.8 percent jump in underlying revenue to 671.1 million euros, boosted by advances in all three major market segments - government, Wifi and other connectivity services, and fixed data.
However, the company’s Video business unit, saw full year revenue fall 5.5 percent to 1.31 billion euros.
SES which is committed to delivering a progressive dividend to shareholders, proposed a payout of 80 cents per A share for 2018, the same as in 2017 when it slashed dividends by 40 percent.
Reporting by Pawel Goraj; Editing by Susan Fenton