SES Astra Sees Strong 1999; Eyes Broadband Services

4/02/2000 8:00 PM Eastern

Betzdorf, Luxembourg-SES Astra S.A., the leading commercial-satellite operator in Europe, reported strong 1999 earnings last month, despite a drain on profits from its stake in Asia Satellite Telecommunications Ltd.

The company said operating profits rose 45 percent to 407 million euros ($391 million) on revenue of 725.2 million euros ($US696 million), up 40 percent from the previous year.

Astra' s European reach-including direct-to-home (DTH) and cable-headend distribution-totaled 78 million homes at the end of its fiscal year, SES Astra director general Romain Bausch said. More than 8 million of those homes received digital signals; Bausch expects that figure to top 10 million by the end of this year.

Distribution to DTH households grew 6.6 percent to 28.3 million homes. SES Astra now reaches more than half of the region' s TV homes, the company said, with 92 of its fleet' s 152 transponders transmitting digital signals.

SES Astra last year bought 34.2 percent of AsiaSat, which, combined with its existing network, gives it coverage of almost three-quarters of the world' s population. Over the next year, said Bausch, AsiaSat will buy new satellites and take part in any consolidation that occurs in the Asian satellite market.

Although AsiaSat weighed down SES Astra' s profits, Bausch said the company is recovering amid Asia' s return to economic growth.

Back on the European front, SES Astra also announced that it would launch two-way broadband-over-satellite service on its 1H Ka-band satellite. The move comes amid increasing demand for Internet services, to which the company now devotes 11.5 transponders.

"We are very much looking to expand in the value chain, not only in the satellite-infrastructure business but also looking at broadband residential services," Bausch said. By 2003, Bausch expects between 30 percent and 50 percent of Astra' s revenue to come from multimedia-related activity, he added.

In four years, SES Astra could have as many as 1.8 million residential broadband-satellite customers, predicts Morgan Stanley Dean Witter & Co analyst Rebecca Winnington-Ingram. She rates the company' s shares a strong buy. Winnington-Ingram wrote in a recent report that satellites could capture as much as 15 percent of Europe' s high-speed Internet market by 2003.

Bausch also said Astra is may raise further funds by selling its stock in the U.S.

Its shares currently trade in Luxembourg.

There are also "quite attractive opportunities" in the Americas, Bausch said. The company appointed business-development director Dean Olmstead to head activities in that region.

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