The company has raised its projected revenues for 2022 to at least $420m, keeping the upper end of the range unchanged at $440m.
With revenue of $107m in Q2 2022, UAE satellite operator Yahsat’s growth momentum continued with a 6.9% year-on-year increase. This resulted in H1 22 revenue growth of 8.1% year-on-year to $206m.
Both Managed Solutions and Mobility Solutions performed well with H1 2022 revenues increasing by 35.1% and 24.1% respectively, the company stated.
In Q2 2022 Adjusted EBITDA of $64m increased by 3.9% year-on-year, generating a margin of 59.8%, while net income (profit attributable to the shareholders) of $25m increased by 77.9% year-on-year. On a year-to-date basis, the group recorded H1 Adjusted EBITDA growth of 5.3% and an increase in net income of 50.7%, resulting in a solid net income margin of 22.1%.
As of June 30, 2022, the group’s contracted future revenue remained strong at more than $2.1bn, equivalent to around 5.2 times FY2021 annual revenue representing an increase of 4.1% since the start of the financial year, underpinned by the five-year $247m managed services mandate awarded by the UAE Government in February 2022.
Commenting on the revenue, Musabbeh Al Kaabi, Chairman of Yahsat, said: “Against a backdrop of challenging global economic headwinds, we are delighted to record our highest ever first-half revenue whilst significantly growing Adjusted EBITDA and net income. This reflects the strength of our business underpinned by strong contracted future revenue and positive momentum across operating segments. In light of our strong year-to-date performance, the Board of Directors’ confidence in future cash flow generation, ability to grow the business and financial strength of the company, we are reiterating our commitment to deliver attractive shareholder returns.”
Ali Al Hashemi, Chief Executive Officer of Yahsat, added: “Yahsat has delivered exceptional results, recording its highest-ever first-half revenue and demonstrating our performance-driven culture to deploy innovative capabilities and grow the business. Our contracted future revenue exceeds $2.10bn, equivalent to 5.2 times FY2021 annual revenue. Looking ahead, we remain on track to bring into commercial service our next generation satellite, Thuraya 4-NGS, in the second half of 2024 whilst two new satellites, Al Yah 4 and Al Yah 5, are under consideration for launch in 2026. We remain very confident in both our short-term and long-term outlook, and have accordingly increased the lower end of our revenue guidance for FY2022, whilst reiterating our commitment to pay a progressive dividend.
We remain committed to pursuing and launching new growth opportunities across the business and we are confident that Yahsat’s robust balance sheet, business resilience and track record in delivering exceptional results will enable us to capture significant value to drive long-term growth.”
Yahsat reiterates its commitment to grow its dividend by at least 2% per year, reflecting the Board of Directors’ confidence in the cash flow generation and overall financial strength of the business. For the financial year 2022, the total expected dividend is a minimum of 16.12 fils per share [US Cents 4.39], split into two equal installments payable around October 2022 and May 2023 respectively. This represents a total dividend payment of $107m. The company’s dividend policy is well supported by its high cash conversion (93.1% in 1H22), robust balance sheet (0.9x Net Debt/EBITDA as of 30 June 2022) and strong discretionary free cash flow (expected to be approximately two times FY2022 dividend payment).
In view of the strong H1 22 performance, the company now raises its projected 2022 revenues to at least $420m with the upper end of the range unchanged at $440m.
Infrastructure accounted for approximately 55% of group revenue in Q2 2022, mainly comprising a 15-year long-term Capacity Services Agreement with the UAE Government. Overall revenue remained broadly stable at $59m. The Infrastructure business offers visibility on future cash flows with contracted future revenue of approximately $1.8bn as of 30 June 2022, which includes a 15-year T4-NGS Capacity Service Agreement worth $708m that will support revenue growth from 2024 onwards.
Managed Solutions, which contributed approximately 22% of group revenue, continued its performance with Q2 2022 revenues increasing by 41.4%, resulting in H1 revenue of $39m, an increase of 35.1% year-on-year. In Q2 2022, the business continued to build its contracted future revenues with the award of other contracts including a mandate to design and deliver advanced satellite communications for UAE Government platforms worth $8m.
Mobility Solutions, accounting for approximately 17% of group revenue, had another successful quarter with Q2 2022 revenues up 7.8% year-on-year. H1 revenues exceeded the prior year by 24.1% with strong growth in both service and equipment revenue. Service revenue increased by 6.5% with double-digit increases across several parts of the business including Voice, Data and Intercarrier. Meanwhile, equipment revenue, which increased by 95%, continued to benefit from the three-year $86m distribution agreement secured in 2021.
YahClick, which accounted for approximately 5% of group revenue, saw year-on-year revenue slightly down by 4.4% in H1, mainly due to the wind-down in July 2021 of a multi-year, opportunistic capacity deal that contributed $2m of revenue in H1 21. The business continued to build strong foundations for future growth with the subscriber base in the consumer broadband business growing by 11% year-to-date and by 24% compared to the same period last year, underpinned by expansion across the Africa region.