July 31, 2020 / 8:23 AM / 6 days ago

UPDATE 1-Satellite group Eutelsat eyes broadband boost after coronavirus hit

* Cites COVID-19 impact for expected drop in 2020/21 sales

* Shares up 1.5%

* Plans to buy European satellite broadband business (Adds detail)

July 31 (Reuters) - French satellite company Eutelsat expects coronavirus-related delays to launch projects and reduced air traffic to result in a slight fall in 2020/21 full-year sales, it said on Friday, but has high hopes for its fixed broadband business.

The group expects revenue of between 1.18 billion and 1.22 billion euros ($1.4 billion to $1.45 billion) from its five core businesses in the 2020/21 financial year.

“This is is principally linked to the impact of COVID-19,” Chief Executive Rodolphe Belmer said in a call.

Belmer cited delays in satellite development and manufacturing and reduced air traffic, hitting revenue generated from aircraft Wifi.

In a company-provided analyst poll, revenue was projected to rise the following year.

Eutelsat reported sales for the year to June 30 of 1.28 billion euros in its core businesses, down 3.9% but ahead of its own guidance and analyst expectations.

The company also announced an agreement with distributor Bigblu Broadband to buy its European satellite broadband activities, in line with its strategy to expand in the market.

Belmer said the coming year would “mark a turning point” for its fixed broadband business, noting the future entry into service of Eutelsat’s Konnect satellite.

Launched in January 2020, Konnect has capacity of 75 gigabits per second for coverage of up to 15 European and 40 African countries.

Eutelsat’s core broadcast segment, which allows customers to transmit TV programmes to households and generates 61% of revenue, was the most reslient, falling only 1.2% after winning a string of contracts in Sub-Saharan Africa.

Its data and professional video division, serving telecoms operators and broadcasters, fell 14.1% in the face of competitive pricing pressure and the suspension of live sports events because of the COVID-19 pandemic.

Eutelsat shares were up 1.5% at 0815 GMT. ($1 = 0.8413 euros)

Reporting by Sarah Morland in Gdansk Editing by David Goodman

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