By Anait Miridzhanian
(Reuters) -Luxembourg-based satellite group SES expects demand for its services in Ukraine to have a positive effect on its second-half revenue, the group said on Thursday after reporting stronger-than-expected quarterly earnings.
Chief Executive Steve Collar said the group had seen rising demand for its defence services following Russia's invasion of Ukraine.
The CEO said GovSat, a joint venture with the Luxembourg government, was particularly well positioned to support the defence of Ukraine.
"It's not life-changing ... but I think important and certainly something that we would expect to see coming through our government revenues in the second half," Collar said on a call with analysts.
This positive momentum should help SES offset the impact of the U.S. withdrawal from Afghanistan, which has dented revenue from its networks business, he said.
Sales at the networks division, which provides governments, telecom firms and cruise lines with satellite connectivity, were stable at 186 million euros ($197.23 million) in the quarter, as demand for commercial aviation and cruise lines started recovering from the pandemic.
The group also said it expected to double the revenue of its U.S. government business following the acquisition of DRS Global Enterprise Solutions announced in March.
SES's core video business reported a 6.4% fall in quarterly revenue due to lower wholesale sales in the United States and lower volumes in European markets.
Satellite players such as SES and Eutelsat are facing challenges as traditional video revenues decline and data becomes the dominant source of satellite industry revenue.
SES's adjusted core earnings (EBITDA) rose 2.4% to 274 million euros in the first quarter, above analysts' average forecast of 258 million.
Its revenue was 448 million euros against analysts' 438-million-euro estimate.
The firm, which broadcasts to more than a billion TV viewers worldwide, also confirmed its outlook for the full year.
($1 = 0.9430 euros)
(Reporting by Anait Miridzhanian in Gdansk; Editing by Milla Nissi and Susan Fenton)