LightSquared payments uncertain, says Inmarsat

Mobile satellite communications group Inmarsat gave a bullish outlook for 2012, but warned about uncertainties relating to the payments from US partner LightSquared, which were 'primary drivers' of revenue growth in 2011.

Inmarsat announced last month that wireless network operator LightSquared, which has a co-operation agreement with the group, had failed to pay $56.25m which became due upon the completion of the "Phase 1 transition". Inmarsat then issued a notice of default to LightSquared under the co-operation agreement which gives 60 calendar days for LightSquared to cough up the cash.

The group announced today that it is in discussions with the US firm "but cannot provide any assurance that the outstanding payment or further payments in relation to the Co-operation Agreement will now be received."

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Meanwhile, total revenue in 2011 rose to $1,408.5m, up 20.2% on the $1,171.6m reported the year before, helped by the 25.4% increase in Inmarsat Global to $958.4m. Revenues at Inmarsat Solutions were up 5.8% at $758.2m.

Pre-tax profit increased by 10% from $334m to $367m during the year, while earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 22.7% to $854.4m. The EBITDA margin improved from 59.4% to 60.7%.

"We are pleased with the progress we are making in MSS [Mobile Satellite Services] subscriber growth and in the development of our next generation Global Xpress satellite services," said Chief Executive Officer Rupert Pearce.

"As a result, we are confident in both the on-going cash flow generation in our core MSS business and in the potential for significantly renewed revenue growth once our Global Xpress services become available from late next year.We expect our 2012 revenue growth trends in our core MSS business to improve on 2011."

The total dividend proposed stands at 40.36 cents per share, up 10% on last year's payout.

BC