Inmarsat plc reports 2009 interim results

Inmarsat plc - 2009 Interim Highlights

• Total revenue $508.7m up 4.9% (2008: $485.0m)
• EBITDA $289.9m up 10.0% (2008: $263.6m)
• Profit before tax $97.0m up 10.5% (2008: $87.8m)
• Interim dividend increased by 5.0% to 12.73 cents ($) per share
• Strong maritime growth, revenue up 9.8%
• Free cash flow more than doubles to $143.6m
• Acquisition of Stratos Global completed
• New distribution terms implemented

Q2 2009 Highlights

• Q2 Inmarsat revenue $173.2m up 5.8% (2008: $163.7m)
• Q2 Inmarsat MSS revenue $170.3m up 7.4% (2008: $158.6m)
• Q2 Inmarsat EBITDA $125.4m up 10.0% (2008: $114.0m)

Andrew Sukawaty, Inmarsat's Chairman and Chief Executive Officer said,

"Our results for the first half and second quarter show that we are on track for solid revenue growth in 2009. In particular, the continuing strong performance of our maritime business, driven by revenue from new services, shows that we are more than offsetting the impact of reduced shipping volumes and vessels not in use. Furthermore, our EBITDA growth and free cash flow remain strongly positive."

Inmarsat Global results

Our Inmarsat Global business delivered growth in MSS revenue of 9.2% for the half year ended 30 June 2009. Maritime growth, adjusted for the impact of volume discounts, was up 9.8% for the first half and was driven by high usage levels across our Fleet, FleetBroadband and Inmarsat B services.

The land mobile sector saw BGAN revenue growth of 32% in the first half and 4,261 subscribers were added. Our land mobile sector revenue growth overall was 0.6% for the first half and was impacted by a number of factors, including the implementation of new pricing incentives which are expected to encourage new demand in the future.

Our aeronautical and leasing sectors continued to see strong revenue growth, being up 25% and 30% respectively in the first half. Net operating costs for Inmarsat Global were down 1.3%, contributing to growth in EBITDA of 12.0%.

Growth in active terminals in the first half of 2009 was 7.3%. The rate at which Inmarsat Global added new active terminals in key services, such as BGAN, Fleet and FleetBroadband, remained consistent throughout the first half of 2009.

Stratos results

Our Stratos business delivered revenue growth of 2.5% for the half year ended 30 June 2009. Stratos' results saw first half MSS revenue growth of 6.2%, offset by lower Broadband revenues. While MSS revenue grew sequentially from the first to second quarter, second quarter revenue was marginally weaker year over year, when compared to a particularly strong second quarter in 2008. Operating costs for the Stratos business were up 2.0% in the first half, contributing to growth in EBITDA of 5.5%.

Liquidity

Our liquidity position remains strong and we are well positioned to meet our funding needs. At 30 June 2009, the Group had net borrowings of $1,414.1m, made up of cash of $173.1m and total borrowings of $1,587.2m. Taking into consideration our cash resources and available but undrawn borrowing facilities of $185.0m, the group had total available liquidity of $358.1m at 30 June 2009. On 16 July we announced that Inmarsat Global had signed a new $500.0m forward starting senior credit facility. The new facility will mature in May 2012 and is available to replace Inmarsat's existing senior facility which matures in May 2010.

Outlook

We continue to see positive trading conditions in our key MSS markets. Importantly, our maritime sector results have maintained healthy growth despite the demand and capacity factors impacting the global shipping industry. A high proportion of our revenue comes from government customers and, in addition, our commercial users tend to have a high degree of day-to-day reliance on our services. As a result of these factors, we are on track for solid revenue growth and a positive overall performance for the Group in 2009.

Our Financial Reports

Inmarsat Holdings Limited, Inmarsat Group Limited, and Stratos Global Corporation are required by the terms of their outstanding debt securities to report quarterly financial results. Inmarsat plc is the ultimate parent company of the Group.

A copy of the interim financial results for Inmarsat plc for the 6 months ended 30 June 2009 is incorporated into this press release and is also available from our website. Copies of the financial reports for Inmarsat Holdings Limited, Inmarsat Group Limited and Stratos Global Corporation for the three and six months ended 30 June 2009 can be accessed via the investor relations section of our website.