February 23, 2018 / 8:18 AM / a month ago

UPDATE 1-Satellite firm SES cuts dividend in "challenging" market

(Updates with details, share reaction)

Feb 23 (Reuters) - Luxembourg-based SES said on Friday it was cutting its dividend by 40 percent, in a bid to strengthen its balance sheet after a year marked by the loss of one of its satellites and intense competition for its video business.

Along with other satellite companies which generate a large part of their revenue from satellite television, SES faces a challenge from online video streaming services.

It was also hit by the loss of its AMC-9 satellite in June, which resulted in an impairment charge of 38.4 million euros.

“Business performance was below our expectations as the market remained challenging throughout 2017, compounded by some fleet health issues,” Chief Executive Karim Michel Sabbagh said.

SES, which sells transmission capacity to the likes of Sky , Canal+ and India’s Zee TV, reported 2017 earnings before interest, tax, depreciation and amortisation (EBITDA) of 1.32 billion euros, down 7.6 percent on a like-for-like basis but in line with a Reuters poll of analysts.

Its video division, which accounts for more than two thirds of revenue, saw full year revenue fall 3.6 percent on a like-for-like basis to 1.38 billion euros.

For 2018, the company expects revenue of 1.30-1.32 billion for the video division, rising to over 1.35 billion in 2020.

The company’s Paris-listed shares were flat at 0813 GMT. (Reporting by Alan Charlish; Editing by Edmund Blair and Alexander Smith)

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