Today SES SA released its financial results for Q2 2020.
This is not investment advice. Please read the disclaimer.
I do currently own shares (economic interest) in mentioned companies.
SES secured liquidity and has a solid financial position. Average debt costs were lowered to 3.3% down from 3.6% in H1 2019. A succesful 400 m€ bond maturing in 2028 was succesfully placed with annual coupons of 2%.
The two segments continue to develop diametrically opposed: video is shrinking and network is growing. As a consequence, the former is loosing some significance and the latter is getting more important: revenue represents 59% of group revenue down from 63% in H1 2019.
Higher visibility on relocation payments and related investment plans paint a favorable longer-term picture. Comments on disciplined financial policy add some color.
No need to update my valuation. My initial investment thesis is still valid. I confirm my fair value estimate of € 14.33 per share.
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SES has >100% Upside. Either the market is stupid (it rarely is!) or you are missing something.
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You are right. And I hope that you are more right on the former! Did you read my initial analysis and valuation?
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Now I did. And it is bold to think the crummy network business will make up for the declining video biz. It is a melting ice cube in my book. Good luck.
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Thank you. Let’s see
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Why exactly is network crummy?
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Do you deem the following scenario to be more likely?
SES’ aero revenue will never grow again, either airlines can’t pay or use services from newer upstarts like. Government and fixed business will stop to grow as well.
The video business will shrink forever, not even our parents will watch TV, and even non-private ARD and ZDF in Germany will stop traditional TV entirely switch to streaming.
Accelerated relocation payments will not happen.
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