(Adds details, deputy CEO comment)
By Alan Charlish
May 11 French satellite operator Eutelsat
Communications said it expects its video business to
return to growth in the 2018/2019 financial year, as it puts
behind problems related to the non-renewal of contracts on its
Hotbird satellite position.
"After we come out of the consequences of the Hotbird purge
... we see the trend for broadcast getting back to slight
positive growth," Deputy Chief Executive Michel Azibert said
during a conference call on Thursday, after the company reported
a 4.9 percent drop in third-quarter revenue.
Satellite companies, which generate a large part of their
revenue from satellite television, have seen their business
model challenged in recent years by the increased popularity of
online video streaming services such as Netflix.
“I would say that [video returning to growth] is key to the
stock returning to higher multiples because I think that is a
big debate at the moment," said Berenberg analyst Robert Berg.
"We are of the view that video is a medium-term growth market
but I don’t know if that is necessarily the consensus view.”
Eutelsat said the fall in third-quarter revenue was due to
pricing pressure in its fixed-data business and capacity issues
on the Hotbird satellites.
Total third-quarter revenue was 364 million euros ($396
million). Revenue at the video applications division, which
accounted for around two thirds of the company's business in
2016, fell 4.1 percent to 228.1 million euros.
The company confirmed its full-year and medium-term
($1 = 0.9200 euros)
(Reporting by Alan Charlish in Gdynia; editing by Susan Thomas
and Susan Fenton)