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New Skies Reports Strong Second Quarter 2005 Performance.

Article Excerpt
HAMILTON, Bermuda -- Second Quarter Revenues up 16 Percent to $59.7 Million, Adjusted EBITDA Increased 31 Percent to $38.6 Million

New Skies Satellites Holdings Ltd. ("New Skies") (NYSE:NSE), the global satellite communications company, today reported financial results for the three- and six-month periods ended June 30, 2005. Revenues for the quarter were $59.7 million, up 16 percent over the same period in the prior year, net loss was $13.2 million and Adjusted EBITDA(a) was $38.6 million, up 31 percent over the same period in the prior year.

Commenting on the results, New Skies CEO, Dan Goldberg, said:

"New Skies had an exceptionally busy and productive second quarter. With respect to our financial performance, I am pleased to report that we increased revenues 16 percent relative to the same period last year, primarily a reflection of the fact that we sold a significant amount of capacity over the last twelve months. Indeed, the utilization of our state-of-the-art satellite fleet grew from 52 percent to 61 percent in that period. In the last quarter we secured a number of important commercial opportunities for data and IP services in Central Asia, the Middle East, Africa and Asia; video services in Southeast Asia, the Indian subcontinent, and Latin America; and government services around the world.

Importantly, the combination of strong top line growth and meaningful cost savings from our continued efforts to enhance our operational efficiency resulted in a 31 percent increase in Adjusted EBITDA on a year-on-year basis. Underscoring the largely fixed cost nature of our operations, Adjusted EBITDA margins grew from 57 percent to 65 percent in this period. Notwithstanding the strong growth in revenue and Adjusted EBITDA, we had a net loss for the quarter of $13.2 million as a result of higher interest charges arising from the debt we put in place to finance the acquisition of New Skies Satellites N.V. by affiliates of The Blackstone Group as well as a one-time fee associated with our initial public offering.

In addition to our strong financial performance, I am pleased that we completed in May our initial public offering on the New York Stock Exchange. The IPO allowed us both to broaden our shareholder base and further reduce our outstanding debt. In this regard, the IPO proceeds, the cash returned to us from Boeing as a result of the renegotiation of the NSS-8 program, and our operating cash flows enabled us to reduce our debt by over $230 million - 31 percent of the total debt outstanding at the outset of the year - in the first six months of this year. And in addition to our emphasis on deleveraging, the commencement last month of our quarterly dividend payments reflects our strong commitment to returning value to shareholders.

I am also pleased to inform you that in July we reached an agreement with SES Global S.A. affiliates relating to certain orbital slot coordination matters. Under its terms, New Skies agreed not to bring an FSS satellite into use at the 125 degrees west longitude location in order to ensure that SES will be able to operate its own satellite at this location without interference. In return, SES will make a total payment to New Skies of $9.5 million, which we expect to receive early this month. This payment will be reflected in our third quarter results.

In sum, our strong year-to-date performance - including our increased capacity utilization rate and meaningful top line and margin growth - is a reflection of the dedication of the entire New Skies team to deliver the highest quality services possible, the customer community's recognition of our powerful and flexible satellites, and our relentless pursuit of enhanced operating efficiency. I am pleased with the progress we have made in the first...