How Is The Needle Moving On Speedcast International (ASX: SDA)?

  • Mar 28, 2019 AEDT
  • Team Kalkine
How Is The Needle Moving On Speedcast International (ASX: SDA)?

On 28 March 2019, Telecom player, Speedcast International Limited (ASX: SDA), Australia’a satellite network service provider, reported a fall in its share price by approximately 3.8% during the early trading hours. However, by the end of the trading session, the closing price of the company’s shares was notes as A$3.670, up by 0.548% as compared to the previous trading day’s closing price.

SDA opened the market at A$3.510. It went as high as A$3.680 and the lowest price recorded for the day was A$3.480. The stock has a given a decent YTD performance of 32.73% and has soared by 27.18% in the last three months.

The year began with the appointment of Chief operating officer, Sebastien Lehnherr to lead the operations team at Speedcast. He is expected to deliver customer support, network operations, field engineering, capacity management, service implementation along with the programs and projects management.

On 9 January 2019, UltiSat, Inc, a Speedcast Company, was awarded a five years contract worth US$23 million to provide managed network services to support U.S. Government customer. Under the contract, UltiSat will be providing fully managed internet and business application services at Forward Operating Base locations across the middle-east as well as the Southwest Asia region.

Besides, the company recently announced its financial results for 12 months which ended on 31 December 2018(CY2018). During the period, the Group revenue increased by 21% to US$623 million.

The company posted 7% increase in the underlying EBITDA to US$132 million. The EBITDA margin reduced by 280 basis points as a result of dilution from the UltiSat acquisition, dilution from the UltiSat acquisition along with the reduced earnings in the Energy division.

The underlying NPATA also went up by 5% to US$48 million. The period reported a strong operating cash flows, however it was lower than its previous corresponding period as a result of temporary working capital investment in the NBN project.

In December 2018, the company acquired Globecomm as a result of which there was an increase in the debt from US$388 million in CY2017 to US$581 million in CY2018. The board declared an unfranked dividend of A$4.8 cents per share.

The company was able to deliver a solid and sustainable growth across its key segments- Maritime, EEM and Government. The company was able to sign two major biggest contracts. Other than the acquisition of Globecomm, the company was also able to double its revenue in its Government division.

In CY2019, the company expects to deliver a moderate revenue growth with an underlying EBITDA range of US$160 million to US$171 million. The company expects that in 2019, their working capital would increase due to a better working capital position with NBN.

On 12 March 2019, Speedcast’s contract with Nabors Industries Ltd got renewed for providing onshore and offshore connectivity services at Nabors’ sites for a period of three years. Thus, indicating the satisfaction of Nabors towards Speedcast’s services.


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