Space42 reports nine-month pro forma results for 2024

(MENAFN- trailrunnerint) Abu Dhabi, UAE, 7 November 2024: Space42 PLC (“Space42” or the “Company”), the UAE-based AI-powered SpaceTech company that seamlessly integrates satellite communications, geospatial analytics and artificial intelligence capabilities for customers globally, and listed on the Abu Dhabi Securities Exchange (”ADX”, under symbol: SPACE42, ISIN: AEE01122B228), announced today its pro forma consolidated financial results for the nine month period ended 30 September 2024.
Following its successful merger between Bayanat and Yahsat on 1 October 2024, Space42, the region’s preeminent player in the space industry, reported robust pro forma results for the nine-month period. EBITDA increased by 6% to USD 230 million whilst net income increased by 17% to USD 119 million. Revenue fell slightly by 7% versus the prior year to USD 428 million. On a normalized basis, adjusting for material, one-off items to allow for like-for-like comparison, EBITDA was 8% lower compared to the prior year at USD 203 million. Normalized Net income reached USD 95 million, which was 10% lower than the prior year and mainly attributable to the first-time adoption of corporate tax in the UAE in 2024. For both normalized EBITDA and Net Income, margins remained strong and in line with the prior year reflecting continuing efforts to optimize the cost base.
Karim Michel Sabbagh, Managing Director of Space42, commented: “With the successful completion of the merger between Bayanat and Yahsat, we have achieved a significant milestone for the SpaceTech industry: combining advanced satellite communications with unique geospatial analytics and artificial intelligence capabilities under a single umbrella to create a new formidable player, Space42.
“As we integrate our capabilities and assets across the value chain, our strategy will be firmly focused on profitable growth, pursuing programs that bring incremental value and where we can sustain a distinct advantage, investing in new capabilities and unlocking opportunities which can be materially scaled. In doing so, we are positioning Space42 to unlock value for our customers, increase operational efficiency and be the industry leader.
“Space42 is entering a new chapter, with a clear focus on creating long-term value for our stakeholders. We have a clear strategic roadmap to drive profitable growth, leveraging our strengths and building new capabilities to prosecute accretive opportunities in areas such as direct-to-device (D2D), IoT, geospatial data capture and advanced analytics, enhancing our overall value proposition to governments and enterprises across the globe.”
The normalized results reflected modest headwinds faced by Space42’s business units, Yahsat Space Services and Bayanat Smart Solutions. Yahsat Space Services, the group’s satellite-infrastructure unit providing satellite communication capacity and managed services to the UAE Government and commercial customers, saw an 8% revenue decline versus the prior year. This business consists of two reporting segments: Government Services, providing infrastructure and managed solutions focused on government customers, and Commercial Services, providing mobility and data solutions largely serving commercial customers. The business unit’s performance can be attributed to the impact on Commercial Services of the unexpected payload anomaly of the Thuraya 3 satellite, as previously disclosed in April 2024, which offset the solid performance in Government Services which grew by 3%.
Bayanat Smart Solutions, the business unit providing geospatial analytics, business process optimization and smart mobility solutions utilizing artificial intelligence, reported a 6% drop in revenues versus the prior year. This business unit consists of two reporting segments: Geospatial Analytics, providing geospatial mapping services, Earth observation and related analytics, and Advanced Solutions, offering business process optimization, smart mobility and other innovative, cutting-edge solutions. The business unit’s performance reflected a shift in the timing and delivery of certain projects within Geospatial Analytics, not unusual given the project-based nature of part of the business and which is expected to recover in future reporting periods as milestones are completed and increasing focus is assigned to programs with recurring revenues and long-term backlog.
Highlights for the period include:
• Revenue of USD 428 million, 7% lower year-on-year, with solid revenue growth in Government Services, and stable revenues in Advanced Solutions offset by lower revenues in Commercial Services and Geospatial Analytics
• EBITDA of USD 230 million, 6% higher than the prior year. On a normalized basis, excluding one-off items, in particular the recovery of USD 30 million in liquidated damages relating to the T4 satellite procurement programme, Normalized EBITDA reached USD 203 million, a reduction of 8% versus the prior year; margins remained strong at 47% (prior year 48%)
• Net Income (profit) of USD 119 million, 17% higher than the prior year helped by higher net finance income and a stronger performance in the Company’s associate investments, notwithstanding the impact of UAE corporate tax introduced this year (9% rate). Normalized Net Income reached USD 95 million, 10% lower versus the prior year, reflecting lower Normalized EBITDA; margins remained strong at 22% (prior year 23%)
• Contracted future revenues of USD 7.1 billion, equivalent to approximately 10 times last-twelve-month revenues
• Strong balance sheet with cash and short-term deposits of USD 723 million, negative Net Debt of USD 40 million and USD 1 billion expected in new advance payments to be received over the construction period of the Al Yah 4 and Al Yah 5 satellites. As a result, the Group’s net debt to last-twelve-month EBITDA stood at negative 0.1 times as of the end of September 2024, providing a strong balance to support future growth strategic priorities
Highlights of Yahsat Space Services for the period include:
• Revenue of USD 298 million, 8% lower year-on-year with 3% revenue growth achieved in Government Services
• EBITDA of USD 212 million, 11% higher than the prior year. Normalized EBITDA reached USD 184 million with improved margins of 62% compared to 60% in the previous year due to the change in product mix and a 13% reduction in the overall cost base
• Net Income (profit) of USD 101 million, 40% higher than the prior year, helped by higher finance income and a stronger performance in the Company’s associate investments. Normalized Net Income (profit) reached USD 75 million, in line with the prior year, notwithstanding the impact of the UAE corporate tax; margins were stronger at 25% (prior year 23%)
• Contracted future revenues of USD 6.6 billion, equivalent to approximately 15 times last-twelve-month revenues for the business unit
Highlights of Bayanat Smart Solutions for the period include:
• Revenue of USD 130 million, 6% lower year-on-year with stable revenues in Advanced Solutions and lower revenue (16%) in Geospatial Analytics reflecting shifts in project timelines
• EBITDA of USD 18 million, 33% lower versus the prior year. Normalized EBITDA reached USD 19 million, a 29% reduction versus the prior year reflecting lower revenue and a change in project mix along with well controlled operating expenses; margins were lower at 14% (prior year 19%)
• Net Income (profit) of USD 18 million, 38% lower year-on-year. Normalized Net Income (profit) reached USD 19 million, 34% lower versus the prior year, reflecting lower Normalized EBITDA and the impact of the UAE corporate tax; margins were also lower at 15% (prior year 21%)
• Contracted future revenues of USD 544 million, equivalent to approximately circa 2 times last-twelve-month revenues for the business unit

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