It was a mixed bag for satellite company Inmarsat Plc (LON:ISAT) this morning as a boost in its aviation and government divisions helped to mask the fact that its largest business, maritime, was down for the second straight year.
Group revenue for the 12 months to 31 December 2016 jumped 4.3% to £1.33bn (2015: £1.27bn), buoyed by a 12.5% rise in aviation revenues (£142.6mln) and a 15% increase in revenues from its government division (£126.8mln).
The firm’s agreement with Ligado Networks – which it upgraded last summer – also raked in US$119.4mln, well up on the £88.6mln the tie-up generated last year.
Those strong performers helped to paper over the cracks of its maritime business – the largest division within Inmarsat – which contracted for the second year in a row.
“Challenging markets” were to blame as revenues in the business slipped 3% year-on-year to £575.3mln, Inmarsat told investors.
The enterprise side of the business – which includes oil and gas services and Internet of Things – also dipped by a little over 9% to £144.6mln as a result of “relatively weak demand in all of its key markets”.
The net result of all that is a 5% increase in the final dividend to 33.37 cents per share (2015: 31.78 cents).
“Despite a challenging operating environment in our markets, we delivered a robust performance in 2016,” said chief executive Rupert Pearce.
“As a result, Inmarsat remains well-positioned to take advantage of a number of significant growth opportunities in the coming years.”
Inmarsat – which provides broadband and communications via satellites for boats, aircraft and remote locations – is forecasting revenues of between US$1.2bn and £1.3bn, excluding Ligado, for 2017.
Inmarsat to supply IAG planes with in-cabin Wi-Fi
In a separate announcement, British Airways owner International Consolidated Airlines Group PLC (LON:IAG) was confirmed as the launch customer for Inmarsat’s European Aviation Network (EAN) high-speed in-flight broadband services.
Inmarsat said the technology will “revolutionise the onboard experience for airline passengers”.
The EAN will allow European passengers to use their personal devices to surf the web, stream videos and play online games.
IAG will equip more than 300 of its aircraft with the technology and aims to have 90% of its short haul fleet kitted out by early 2019.
Leo Mondale, President of Inmarsat Aviation, said: “The rollout of our European Aviation Network is progressing at full pace and today's contract signing with IAG as our launch customer has reinforced once again how Inmarsat's aviation strategy is coming together.”
The satellite that will enable the improved Wi-Fi services is expected to be launched at some point in the middle of 2017.
Lufthansa and Air New Zealand are among several other customers who are reportedly signed up and awaiting installation.
Inmarsat shares added 6% in early deals to 730p.
--Updates for IAG deal and share price--