One of the worst performers today, Speedcast International Ltd (ASX: SDA) shares have closed sharply in the red after plummeting 37.41% or $2.51 lower to $4.20.
The communication and IT solutions provider today announced its financial results for the six-month period ended 30 June 2018.
Group revenue grew 24% to US$304.9 million while underlying NPATA grew 37% to US$21.1 million.
Underlying EBITDA grew 14% to US$60.4 million with EBITDA margin impacted by 180 basis points to 19.8%. Speedcast attributed this to dilution from the UltiSat acquisition in November 2017 as well as phase 1 of the NBN contract and delays in the recovery of the energy market.
CEO Pierre-Jean Beylier said: “We are pleased with the organic growth we achieved in the first half of 2018 across Maritime, Government, and EEM. Disappointingly, the Energy sector suffered from delays in the market recovery, but we remain bullish about our ability to significantly benefit from the Energy sector’s recovery, which we believe will be stronger than previously forecasted.”
Speedcast declared a fully franked interim dividend of AU$2.40 cents per share.
Acquisition of Globecomm
Speedcast also announced today that it has entered into a definitive agreement to acquire Globecomm Systems Inc.
The acquisition from affiliates of HPS Investment Partners, LLC and Tennenbaum Capital Partners, LLC will set Speedcast back an estimated US$135 million.
Expected to close in Q4 2018, Speedcast estimates the acquisition will generate over US$15 million in annual cost synergies within 18 months after the transaction is complete.
Speedcast says it expects Underlying EBITDA for the full year 2018 to be in the range of
US$135 million to US$145 million.
Since the beginning of 2018, the Speedcast International Ltd share price has fallen 21.64% compared to the S&P/ASX 200 Index which has gained 3.95% in the period.