Satellites maker SES beats profit estimates, sees upside to market consolidation

Satellite company SES’s CEO reiterated on Thursday he saw industry consolidation as a good thing for the highly competitive market, but would not comment on merger rumours after the group posted stronger-than-expected half-year earnings.

The Financial Times reported on Thursday SES was in talks to merge with its U.S. rival Intelsat SA, signalling consolidation in the rapidly changing and competitive industry.

“We’ve talked on this call and on analyst calls about industry consolidation and how that is … from my perspective at least, a good thing for the industry, but we obviously don’t comment on any market rumours or speculation,” Chief Executive Steve Collar told reporters in an earnings call.

“Whatever we do, obviously we will do in the best interest of SES shareholders,” he added.

Intelsat did not immediately respond to Reuters’ request for comment.

Last week, French rival Eutelsat said it was in talks over a possible merger with Britain’s OneWeb, which could help both companies challenge the likes of Elon Musk-owned SpaceX’s Starlink and Amazon.com’s Project Kuiper.

SES reported adjusted core earnings (EBITDA) of 545 million euros ($554 million) for the January-June period, against analysts’ average estimate of 539 million in a company-provided poll.

The Luxembourg-based group said it secured several important renewals for its core video segment in the first six months of the year, and also saw growth in its HD+ and Sports and Events businesses.

Satellite players, such as SES and Eutelsat, have been facing challenges as traditional video revenues decline and data becomes the dominant source of satellite industry revenue.

SES’s half-year revenue was 899 million euros, slightly above analysts’ 895-million-euro estimate.

“We are fully on track to deliver on our full year revenue and EBITDA outlook,” said Collar in a statement.