Dubai: The Abu Dhabi satellite services company Yahsat saw revenues stay flat, totaling Dh753 million, in first-half 2023, net profit got a solid lift, up 5 per cent to Dh175 million. That also helped raised Yahsat’s overall margins to 23 per cent from 22 per cent in 2022.
Equally promising is the company’s contracted revenues, of Dh7 billion, and which is 4.4 times the last 12-month tally.
All of which would have prompted the decision to increase the 2023 dividend by at least 2 per cent, to 16.46 fils per share - or Dh402 million in all. Based on the last closing share price, this 'implies an annualised dividend yield of over 6 per cent, amongst the highest offered by UAE listed stocks', said Yahsat. (The company's stock is at Dh2.61.)
“The satellite industry continues to witness substantial investments and the development of new business models,” said Ali Al Hashemi, Group CEO. “Together, these forces are driving industry consolidation and the necessary emergence of larger and stronger players.
“Yahsat remains in a strong position to take advantage of these developments, underpinned by our unique backlog of future revenues and our historically strong and robust balance-sheet.”
Yahsat operates multiple divisions, with the biggest being that providing communications capacity to the UAE government. There is also its data solutions services, which offer satellite-based broadband data solutions.
'Negative' on net debt
Where Yahsat's financials make an equally decisive point is through its 'negative' net debt status, which stands at Dh454 million plus. (A negative net debt is when a company retains more cash/cash equivalents than its financial obligations.)
Total available liquidity as of end June was Dh2.3 billion, and the 'long-term visibility of future cashflows supports Yahsat’s future investment in organic growth and opportunistic acquisitions'.
All 'without impacting its attractive progressive dividend policy'.
According to the CEO, “In addition to completing the Thuraya-4 NGS satellite procurement programme - on track to be launched in the first-half of 2024 - we have signed an Authorization-to-Proceed (ATP) with Airbus, a longtime partner of Yahsat, to commence initial activities relating to the procurement of the Al Yah 4 and Al Yah 5 satellites.
"In parallel, we are in advanced negotiations with the UAE government to secure a long-term contract that would significantly increase and extend our backlog of contracted revenues beyond 2040."