Growth in government contracts helped drive first-half revenue at Inmarsat, which provides broadband services for ships, aircraft and remote land areas, but profits were down because of a big increase in capital expenditure and a rise in financing costs.
With user demand for inflight wifi on the rise, the London-based company is investing in its aviation division. New contract wins with Qatar Airways and Avianca, the Colombian airline, have brought the total of aircraft expected to install its passenger cabin broadband to 1,200. It is also planning to launch its continent-wide European Aviation Network with Lufthansa this year, after a recent satellite launch.
Capital expenditure more than doubled to $300.8 million, driven by a big increase in its aviation division in the first half. The company expects capital expenditure to be between $500 million and $600 million for each of 2017 and 2018.
Rupert Pearce, chief executive, said: “We are investing in our organisational infrastructure, cyber capabilities and our IT systems and processes.”
Overall, revenues rose to $688.2 million, up 9.4 per cent. Net financing costs rose $10.7 million to $50.2 million.
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The company increased its interim dividend by 5 per cent to 21.62 cents per share. Shares fell 3.74 per cent to 758½p.