Europe is seeing increasing political demand for a sovereign LEO satellite constellation, independent from foreign partners. However, in our view, the current solution (IRIS2) is not viable in its current form. So what can Europe do to fix IRIS2? In two quick slides, we offer some ideas.
Yesterday the European Commission announced that they had awarded the IRIS2 contract to the SpaceRISE consortium (Eutelsat + SES + Hispasat). In this Quick Take we review what we know about the IRIS2 contract, and what this means for Eutelsat’s OneWeb.
We caught up with the company ahead of the Q1 results (29 October), with the key takeaway being that the FY25 EBITDA guidance is more negative than we (and consensus) had understood. We now expect an additional +€0.1bn of OneWeb funding costs, reducing our equity price target to €3.2/ share (from €3.5). For the bondholders, these revisions don’t change the fundamental debate and we continue to rate the bonds Overweight.
The FT is reporting that Eutelsat is looking for alternative funding sources for their second-generation LEO constellation, potentially in the form of ‘industrial and commercial partnerships’. In this Quick Take we discuss implications for the bonds.
Following the OneWeb merger, Eutelsat became the world’s first integrated LEO-GEO satellite operator – managing a declining legacy business whilst launching a LEO operator looking to compete with Starlink, Kuiper and others. For the bondholders, the key question is how much the restricted group will pay towards OneWeb funding costs. We estimate OneWeb will require €2bn of funding, with €1bn of this coming from the restricted group.
The Capital market day provided interesting insight on the merger project with OneWeb. In particular we welcome the guidance provided on revenues and EBITDA, as well as the additional information shared on Gen 2. We acknowledge the project’s long term strategic and business rational, but although OneWeb Gen 2 will improve economics, competition will strengthen in the meantime and we still stand short of the management objectives. Execution risks are high, capex phasing is uncertain and it is sti...
Satellite communications have entered the NewSpace age, where a tech-investment boom and the emergence of massive non-geostationary constellations are likely to reshuffle the cards between established players and deep-pocketed new entrants. In this report, we review market opportunities in the sector, as well as technological disruptions and the challenges facing incumbents, while extending our coverage to initiate SES and Eutelsat. We initiate Eutelsat with a Sell recommendation, with the acqui...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
Unfortunately, this report is not available for the investor type or country you selected.
Report is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.