(OT) Lots of money to be made if Pan Am Sat can make money last year.
(Phillips Telecom)
PanAmSat Reports 1998 Fourth Quarter and Year End
Financial Results
PanAmSat Corp. [SPOT] shrugged off a problematic year in its space segment to report strong growth for the fourth quarter and
year ended Dec. 31.
Despite the total loss of two satellites (Galaxy IV and Galaxy X) and the anomalies that hit others (PAS-4, PAS-5, PAS-8, Galaxy
7 and Galaxy 8I), the company's total revenues for 1998 increased to $767.3 million, compared to revenues of $756 million for
1997. The increase was attributed to higher operating lease revenues in 1998, partially offset by a decrease in sales and sales-type
lease revenue. Total sales-type lease revenues were $30.6 million for 1998, compared to $71.3 million in 1997. Operating lease
revenues for 1998 increased by 8 percent to $736.6 million because the company rolled out commercial service on two new
satellites, PAS-5 and Galaxy 8-I. The birds were launched in the latter part of 1997 and generated a full year of operating lease
revenues in 1998. Lease revenues were $684.7 million in 1997.
But PanAmSat's growth in 1998 might have been more robust. It was limited by several factors, including the loss of the Galaxy X
satellite during a launch failure in August 1998 and the reduced usable capacity of the PAS-6 satellite. Operating lease revenues
reflect long-term satellite service agreements from which PanAmSat derives revenues over the duration of the contract.
Earnings before net interest expense, income taxes, depreciation and amortization (EBITDA) was $553.3 million, or 72.1 percent
of total revenues, for the twelve months ended Dec. 31, 1998, compared to EBITDA of $543.5 million, or 71.9 percent of total
revenues, for the same period in 1997. The increase reflects lower sales costs and lower leaseback expenses, partially offset by
increased operating expenses associated with the normal growth of the company's operations.
As of Dec. 31, PanAmSat had long-term contracts for satellite services representing future payments of about $6.3 billion.
(Mitchell Burd, PanAmSat, 203/622-6664.)
|
