SES raises outlook on early Intelsat gains despite Q3 earnings miss (updated)

Eutelsat Communications SA

06/11/2025 07:17

Adds consensus comparisons to outlook in paragraphs 3-4, shares in paragraph 5, details on debt and spending in paragraphs 6-8, shares in last paragraph

SES's raised revenue and EBITDA forecasts lag consensus estimates

Intelsat acquisition raises net debt to 6 billion euros

Group slashes capital expenditures amid depletion of cash reserves

Shares fall more than 13%

By Alban Kacher

Nov 6 (Reuters) - SES SESFd.PA raised its annual earnings and revenue forecasts less than the market had expected, triggering a sharp selloff in its shares on Thursday, as the satellite group grapples with mounting debt following its acquisition of Intelsat.

While the company cited early gains from the $3.1 billion acquisition as a reason for the guidance hike, with both metrics set to grow from last year, its third-quarter core profit missed market expectations due to costs of the Intelsat integration.

SES is also facing delays in public contract renewals in the U.S. due to the government shutdown, pushing expected revenue into next year, finance chief Elisabeth Pataki said during a post-earnings call.

The group sees 2025 revenue between 2.6 billion and 2.7 billion euros ($3.0 billion and $3.2 billion), with a midpoint of the range landing 3% below a company-provided consensus.

It forecast adjusted earnings before interest, taxes, depreciation and amortization of 1.17 billion to 1.21 billion euros, which indicates a margin of 44.9% at the midpoint, according to calculations by analyst Aleksander Peterc from Bernstein. That would be 240 basis points below the current consensus.

As of 0906 GMT, the company's Paris-listed shares were down 13.5%, on track for their biggest one-day drop since June 2023.

POST-MERGER DEBT SPIKE

SES completed the acquisition of rival Intelsat in July, as it seeks to position itself as a key European competitor to Elon Musk's Starlink and Amazon's AMZN.O Project Kuiper alongside French peer Eutelsat ETL.PA.

Its adjusted net debt was 6 billion euros at the end of the third quarter, up from 1.1 billion euros a year earlier.

The acquisition strongly depleted the group's cash reserves, with cash and cash equivalents falling to 965 million euros from 4.3 billion euros at the end of the previous quarter, before the deal was closed.

This has led SES to slash its capital expenditures compared to last year. It expects to spend around 600-700 million euros as a combined group this year, after investing some 900 million euros in 2024 as a standalone.

This measure is part of a wider plan to cut spending, which also includes workforce reductions and non-replacement of some of its satellites.

($1 = 0.8575 euros)

(Reporting by Alban Kacher in Gdansk, editing by Milla Nissi-Prussak)

((alban.kacher@thomsonreuters.com; +48 58 769 65 87))