Dubai: Abu Dhabi’s satellite maker Yahsat has given its shareholders quite the lift, rewarding them with a Dh192.74 million dividend payout for the second-half of 2021. This will be paid out by May 11. For 2021 in full, Yahsat, which listed on ADX last year, is crediting Dh385.54 million into shareholder accounts.
This represents a dividend yield of 5.6 per cent, and among the higher ones issued by a listed company in the UAE for 2021. “We are pleased to be able to deliver on our dividend commitment made at the time of the IPO," said Musabbeh Al Kaabi, Chairman. "Our shareholders approved a final dividend for fiscal year 2021 of Dh192.7 million, or 7.90 fils per share, bringing the total for the year to Dh385.5 million, or 15.80 fils per share.
This is "reinforcing our position as one of the highest dividend yielding stocks on ADX and our commitment to shareholder value creation. We also reconfirm our plans to grow the dividend by at least 2 per cent per annum, which, going forward will be paid semi-annually starting in October 2022."
In 2021, Yahsat, which won some major government contracts, reported a net income of Dh256.2 million – its highest to date - on revenues of Dh1.49 billion. It has contracted revenues of Dh7.3 billion plus, which is a solid 35 per cent increase over 2020 numbers.
This year, Yahsat - which lists satellite-based communications firm Thuraya as a subsidiary – forecasts revenues of Dh1.52 billion to Dh1.62 billion. “The satellite industry is set for growth both nationally and internationally and we are well positioned to capture an increasing share of this growing market,” said Ali Al Hashemi, Group CEO of Yahsat, in a recent statement.
"We are in the process of reviewing our strategy to identify more growth opportunities, both organic and inorganic, to capitalize on our strong business and financial platform and deliver even more long-term and sustainable value for our shareholders."
Last October, Yahsat was appointed by the UAE Government to do an assessment and recommendation to procure two new satellites, with a likely launch in 2026. "These will further bolster our contracted future revenues and reinforce our value proposition," said a Yahsat official.
"We have also taken important steps to strengthen our position in other key business verticals, including the oil and gas sector, where we signed a MoU with Mubadala Petroleum to provide connectivity for its broad operations across EMEA and Asia. This builds on the Group’s earlier success in becoming the preferred supplier of satellite solutions for ADNOC. In 2021, our oil and gas revenues more than doubled."
We are fortunate that we have the cashflow and balance-sheet strength to deliver attractive and growing dividends and the flexibility to consider new avenues and opportunities for growth on both the government and commercial fronts
5G is not a 'threat'
"We do not anticipate a material impact from the rollout of 5/6G," said a spokesperson. "Broadly speaking, our satellite services are geared towards two customer groups not serviced by traditional telecommunication networks. The first includes those outside the coverage area of existing telecommunications networks and the second are entities that require secure communication networks such as governments and the defence sector.
"In general, the rollout of (new) mobile technologies are seen as a threat; but on the contrary, the reality is that mobile rollout often benefits the satellite sector. For example, alignment of standards for 5G allows for seamless integration of the networks, bringing ubiquity and resilience via satellite to mass applications such as IoT.
"We mustn’t also forget that each 5G site needs connectivity, and fiber never reaches all the sites, therefore leaving an increasing opportunity for backhaul via satellite, which is a growing segment for Yahsat."
- Yahsat's mobility solutions unit saw 'robust growth' across its voice, maritime and government businesses. There was strong demand in the international markets. "We remain focused on capitalizing on this demand by diversifying our product portfolio," a Yahsat spokesperson said. In 2021, this unit signed eight new distribution partnership agreements.
- The Abu Dhabi firm has four business lines – infrastructure, mobility solutions, managed solutions, and data solutions. Of these, the infrastructure business is the largest, contributing 57.9% of total revenue and more than three-quarters of adjusted EBITDA. "Yahsat maintains industry leading margins, with an overall adjusted EBITDA margin of 59% in 2021," said the spokesperson. "Going forward, we expect our margins to remain healthy and within the range of 55-60%."