• 1Q22 revenue of AED 362.5 million [USD 98.7 million], up 9.4% year-on-year
• 1Q22 Adjusted EBITDA of AED 213.4 million [USD 58.1 million], up 6.8% year-on-year with a healthy margin of 58.9%
• Net Income (profit attributable to shareholders) of AED 73.8 million [USD 20.1 million], up 26.4% year-on-year
• Contracted future revenue of AED 8.1 billion [USD 2.2 billion], up by AED 642.1 million [USD 174.9 million] or 8.6% since the start of the year
• Awarded a 5-year AED 908.9 million [USD 247.5 million] managed services mandate by the UAE Government for satellite communications capabilities
• Strong Discretionary Free Cash Flow (DFCF) of AED 333.1 million (USD 90.7 million), supporting an attractive dividend expected to total at least 16.12 fils [US cents 4.39] per share, an increase of 2%, split into two equal instalments around October 2022 and April 2023
• FY2022 guidance range maintained

Al Yah Satellite Communications Company PJSC (“Yahsat” or “the Group”) listed on the Abu Dhabi Securities Exchange (“ADX”) under (SYMBOL: YAHSAT) (ISIN: AEA007501017), the UAE’s flagship satellite solutions provider, today announced its financial results for the three-month period ended 31 March 2022 (“1Q22”).

Ali Al Hashemi, Group Chief Executive Officer of Yahsat, commented:

“Yahsat has had an excellent start to 2022 with significant year-on-year growth in revenue, adjusted EBITDA and Net Income. With the recent award of a 5-year managed services mandate from the UAE Government, reinforcing our position as its preferred satellite solutions partner, we strengthened our foundations for long term sustainable growth, and now show contracted future revenue of AED 8.1 billion (USD 2.2 billion), 5.4 times our annual revenue.

“With almost 90% of remaining projected revenue for the current year already secured, we remain very confident in our outlook for Yahsat and reiterate our guidance for FY2022.”

Financial Overview

 * (as of 31 Dec 2021)

Following the exceptional performance in 4Q21, Yahsat has continued building on its strong momentum in 2022 with first quarter revenue of AED 362.5 million [USD 98.7 million] reflecting an increase of 9.4% year-on-year. All business segments performed well with a particularly exceptional performance in both Managed Solutions and Mobility Solutions, which increased by 26.0% and 45.4% respectively.

As at 31 March 2022, the Group’s contracted future revenue stood at AED 8.1 billion [USD 2.2 billion] equivalent to around 5.4 times annualized revenue. Future revenue increased by 8.6% since the start of the financial year and by 47.3% since the beginning of 2021, underpinned by the recent 5-year AED 908.9 million [USD 247.5 million] managed services mandate awarded by the UAE Government.

Adjusted EBITDA of AED 213.4 million [USD 58.1 million] increased by 6.8% year-on-year, generating a strong margin of 58.9%. Net income (profit attributable to shareholders) of AED 73.8 million [USD 20.1 million] increased by 26.4% year-on-year, resulting in a higher net income margin of 20.4% versus 17.6% in the prior period.

The Group’s balance sheet remained strong. At 31 March 2022, the Group’s net debt stood at AED 382.1 million [USD 104.0 million] with a leverage ratio (net debt to Adjusted EBITDA) of 0.4x.

Together with Discretionary Free Cash Flow for the period of AED 333.1 million [USD 90.7 million] and a cash conversion ratio of 97.6%, the Group is well positioned to meet its future dividend, growth and capital expenditure commitments.

Operating Segments

Infrastructure

Infrastructure accounted for approximately 60% of Group revenue, mainly comprising the 15-year long-term Capacity Services Agreement with the UAE Government. Overall revenue remained broadly stable at AED 217.7 million [USD 59.3 million].

Managed Solutions

Managed Solutions, contributing approximately 15% to Group revenue, continued the strong growth momentum seen in 4Q21. 1Q22 revenue grew year-on-year by 26.0% reflecting the consistent uptake of recommissioned projects that were delayed in 2021, in addition to new requirements stemming from the expansion of the Oil & Gas sector.

On 3 February 2022, Yahsat Government Solutions (“YGS”) was awarded a AED 24 million [USD 7 million] contract by Abu Dhabi Ship Building (“ADSB”) to provide advanced and secure satellite communication services. Yahsat will design, deliver and integrate the satellite communication systems in vessels produced by ADSB. 

On 8 February 2022, Yahsat Government Solutions (“YGS”) was awarded a AED 908.9 million [USD 247.5 million] mandate to provide enhanced managed services to the UAE Government for its satellite communications capabilities. The agreement augments the previous operations and maintenance services provided, to include technology management support, from January 2022 until the end of 2026. This mandate reinforces Yahsat’s long-standing relationship with the UAE Government, which has existed for more than a decade, highlighting the Group’s role as the preferred partner for capacity and solutions since 2011.

Mobility Solutions

Mobility Solutions accounted for approximately 19% of Group revenue and recorded stellar year-on-year growth of 45.4%, capitalizing on its exceptional 4Q21 performance. Service revenue increased by around 4% with double digit growth in both Voice and Data whilst Equipment revenue soared by more than 5 times, underpinned by the three-year AED 316 million [USD 86 million] distribution agreement secured in 2021.

Data Solutions

YahClick accounted for approximately 6% of Group revenue and recorded year-on-year revenue growth of 4.4% with increases across both its Consumer broadband and Enterprise businesses. Consumer broadband subscribers continued to ramp up with an increase over the past 12 months of 25%. Enterprise revenue grew by more than 15% from the realization of the strong pipeline of cellular backhaul opportunities secured in 2021.

Dividend

At the Annual General Meeting on 11 April 2022, shareholders approved the updated dividend policy allowing payment of semi-annual dividends going forward as well as the Company’s final dividend payment for fiscal year 2021. As a result, Yahsat proposes to pay an interim dividend to shareholders in October 2022 and maintain semi-annual dividend payments going forward.

A final cash dividend of AED 192.7 million [USD 52.5 million], or 7.90 fils [US Cents 2.15] per share, for fiscal year 2021 was paid on 9 May 2022 to all shareholders of record as at 21 April 2022.

For fiscal year 2022, the total expected dividend is 16.12 fils per share [US Cents 4.39], split into two equal instalments around October 2022 and April 2023 respectively. This represents a total dividend payment of AED 393.3 million [USD 107.1 million]. Yahsat reiterates its commitment to grow its dividend by at least 2% per year, reflecting the Board of Directors’ confidence in the financial strength of the business.

Guidance Update

With almost 90% of the remaining projected revenue for FY2022 already secured, Yahsat reiterates its FY2022 guidance provided on 1 March 2022. The Company expects sustained momentum whilst maintaining a robust balance sheet and cash flow to support dividend payments and growth investments.

Approximately 85% of 2022 projected Capex and Investments, equating to about AED 698 million [USD 190 million], is related to the T4-NGS program which will be fully funded through a combination of debt and an advance payment from the 15-year T4-NGS Managed Capacity Services Agreement.

The numbers in UAE Dirhams (AED) have been derived by converting the underlying US Dollar (USD) values using a standard exchange rate of 1 USD = AED 3.6725. Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Alternative Performance Measures

Yahsat regularly uses alternative performance measures which are relevant to enhance the understanding of the financial performance and financial position of the Group. These measures may not be comparable to similar measures used by other companies; they are neither measurements under IFRS nor any other body of generally accepted accounting principles and thus should not be considered as substitutes for the information contained in the Group’s financial statements.

The numbers in UAE Dirhams (AED) have been derived by converting the underlying US Dollar (USD) values using a standard exchange rate of 1 USD = AED 3.6725. Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Conference Call

The 1Q22 earnings announcement for the three months ended 31 March 2022 can be found on the Company’s website at https://www.yahsat.com/.

A conference call followed by a Q&A session, to discuss 1Q22 earnings, has been scheduled for Wednesday, 11 May 2022 at 16.00 (GST) / 13.00 (BST) / 08.00 (EDT). The call will be hosted by Ali Al Hashemi (CEO), Andrew Cole (CFO), Amit Somani (CSO) and Layla Al Hayyas (Head of Investor Relations). Interested parties are invited to join the call by clicking here.

¹‘Investments’ refer to investments in associates, net of any dividends received, and capital returned.

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