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UPDATE 1-SES cuts 2009 growth target after Q3 results

Published 10/23/2009, 02:28 AM
Updated 10/23/2009, 02:33 AM
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* Lowers 2009 revenue growth forecast to 1.5 percent

* Q3 revenue, earnings below expectations

* Forecasts 5 percent annual revenue growth for 2010-2012

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BRUSSELS, Oct 23 (Reuters) - SES, the world's second largest satellite operator, cut its full-year growth outlook after posting third-quarter results below expectations.

SES, in a sector which has generally shown little sign of pain from the economic downturn, said on Friday it now expected recurring revenue to grow by about 1.5 percent in 2009, compared with a previous forecast of 3-4 percent.

Full-year revenue from services activities was expected to fall due to lower equipment sales and delayed revenue recognition on certain large projects.

However, the impact on profit would be limited since the margin on service activities was far lower than that of its core infrastructure business, the company said.

SES, which sells transmission capacity to the likes of BSkyB, Canal Plus, Premiere and NBC, said third-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) totalled 294 million euros ($440 million). The average forecast in a Reuters poll was 306 million euros.

Revenue and net profit figures were also lower than analyst expectations.

SES said revenue was reduced due to the timing of recognition on certain large service contracts. The weakening dollar, currently at year-lows of about $1.50 to the euro, also had an impact.

The company said it expected a compound annual growth rate for recurring revenue of 5 percent for 2010-2012 despite the termination of analogue direct-to-home transmissions in Germany, the bulk of which was expected to occur in 2012.

"This topline growth translates into a corresponding, recurring EBITDA growth," SES said.

Intelsat took over the number one spot from SES when its $3.2 billion takeover of PanAmSat completed in 2006. Eutelsat is the other main commercial satellite operator. (Reporting by Philip Blenkinsop; Editing by Dan Lalor) ($1 = 0.6679 euro)

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