Al Yah Satellite Communications Company (Yahsat), the UAE’s leading satellite solutions provider, reported a significant increase in its first-half (H1) net income, which soared by 62% to AED269 million ($73 million), even as revenue decreased by 3% to AED734 million.
Yahsat’s EBITDA saw a substantial rise of 25% to AED566 million. On a normalised basis, after adjusting for significant one-off items to enable a like-for-like comparison, EBITDA remained stable at AED462 million compared to the previous year. Normalised net income reached AED175 million, also stable despite the notable impact of UAE corporate tax, which Yahsat implemented for the first time this year.
This resilient performance was driven by revenue growth across two key segments. The Infrastructure segment, Yahsat’s largest, which provides communications capacity to the UAE Government through an index-linked long-term contract, continued to show year-on-year revenue growth of 1%.
Value-added Solutions
The Managed Solutions segment, Yahsat’s second largest by revenue, offers comprehensive value-added satellite communications solutions primarily to the UAE Government and related entities. This segment reported impressive revenue growth of 15%, maintaining robust EBITDA margins of over 60% and building on a strong performance from the previous year.
Conversely, the Mobility Solutions segment, which offers mobile satellite services using L-band spectrum, recorded lower revenues, mainly due to fewer equipment sales following the Thuraya 3 satellite anomaly in April 2024. The Data Solutions segment, the group’s smallest, which provides satellite-based broadband data solutions, experienced a slight revenue decline due to lower subscriber numbers and associated equipment sales as the business strategically pivots towards higher margin markets.
Yahsat’s contracted future revenue stands at AED24.5 billion, approximately 15 times the last-twelve-month revenue and only 2% lower compared to the start of 2024.
The company demonstrated strong cash generation with a Discretionary Free Cash Flow of AED287 million, slightly lower than the previous year but well above expectations. Yahsat’s balance sheet remained robust, with a strong cash position of AED1.5 billion, net debt of only AED115 million, and AED3.7 billion expected in new advance payments to be received over the construction period of the Al Yah 4 and Al Yah 5 satellites.
Bridge Facility
The group also has access to an AED1.1 billion bridge facility, partially drawn down in July, ensuring long-term visibility and security of future cash flows up to 2043.
Yahsat has reiterated its guidance for revenue, EBITDA, and cash flow but has revised expected CapEx for the full year to AED1.5-1.6 billion from AED1.7-1.8 billion following the signing of the full procurement contract for Al Yah 4 and Al Yah 5 with Airbus in June 2024.
Ali Al Hashemi, Group Chief Executive Officer of Yahsat, commented: “Yahsat has achieved another set of resilient results, demonstrating solid growth in our core government business, offsetting headwinds in our mobile satellite services segment.
“We continue to progress towards finalizing the full contract for the new $5.1 billion Capacity and Managed Services Mandate with the UAE Government. During the last quarter, we signed the full procurement contract with Airbus for two new satellites, Al Yah 4 and Al Yah 5. Additionally, we are working towards the successful launch of the Thuraya 4 next-generation satellite in the fourth quarter of this year, which will significantly upgrade Thuraya’s capabilities and product line for many years to come.
“Finally, we are looking forward to completing the merger with Bayanat in the second half of the year and are finalizing plans for the successful integration of both companies. This merger will position the new combined entity – Space42 – as an AI-powered space technology champion in the MENA region with global reach. For the first time in our industry, we will combine advanced satcom solutions and geospatial analytics, operating communication and Earth Observation satellites across multiple orbits.”
