February 19, 2025 06:45 GMT
COMMUNICATIONS: SES Outlook Cut To Negative At Moody’s
COMMUNICATIONS
SESGFP Baa3[N]/NR/BBB
Outlook cut at the close on higher competition, innovation risks, and leverage concerns post-Intelsat.
- Similar language to Eutelsat’s recent downgrade on excess capacity from LEO broadband services being redistributed to SES verticals e.g. maritime, aviation, gov’t.
- Some protection noted on specific/regulated requirements in these verticals while SES’ position in multi-orbit offerings helps differentiate their offering.
- PF leverage seen at 3.5x in 2024, increasing toward 3.8x in 2026 before returning towards 3x by 2027 on synergies and earnings growth. Potential acceleration on C-band proceeds.
- Liquidity described as good; 2025 FCF seen marginally negative before strengthening in 2026.
- Downgrade if competition drives further pricing pressure, gross lev remains >3.25x (prev: >3.75x) and neg FCF is sustained, or gov’t reduces stake.
- SES response says FY results on 26 Feb better-than-expected w/ revs at top end of EUR 1.94-2bn range and EBITDA above the EUR 950-1000mn range (cons is EUR 2bn and EUR 1bn). Affirmed IG commitment.
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