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Avanti Communications H1 Revenues Climb 68%, But Loss Widens; Shares Up

Shares of satellite operator Avanti Communications Group Plc (AVN.L) rose about 10 percent Tuesday morning, after the firm reported a 68 percent surge in first-half revenues and said sales momentum for HYLAS 1 and 2 satellite systems continue to build very well.

The company posted a wider loss for the first half, reflecting higher costs mainly due to increased satellite depreciation related to the recently launched HYLAS 2.

As at December 31, the company has a backlog of firm committed orders of 290 million pounds, up 60 percent from the end of December 2011.

The company, which sells satellite data communications services to telecoms companies, noted that HYLAS 2 is fully operational and attracting major telco customers. Avanti said it has 'enough' business in backlog and has over 40 million pounds of revenue in backlog for the year to June 2014.

John Brackenbury, CBE, Avanti Chairman said, "We operate in rapidly developing markets in Africa and the Middle East which are showing very strong demand for our market-beating services, with several HYLAS 2 beams already fully sold....We are winning high value added business at expected prices in Europe as well as emerging markets."

For the first half, Avanti posted loss before tax of 15.94 million pounds, wider than the prior-year loss of 6.61 million pounds. On a per share basis, loss was 12.85 pence, compared to a loss of 6.36 pence per share a year earlier. Revenues for the period climbed 68 percent to 8.63 million pounds.

Cost of sales surged to 5.79 million pounds from 2.56 million pounds reported a year ago. Cost of satellite depreciation was 9.18 million pounds, up from 4.86 million pounds in the preceding year. Operating expenses also advanced to 8.96 million pounds from 6.21 million pounds a year earlier.

The company attributed the increased costs to rise in satellite depreciation relating to the HYLAS 2 satellite, while little HYLAS 2 revenue was yet accounted for in the same period. Also, the three HYLAS 2 ground stations have operational costs incurred from the in service date.

Construction of HYLAS 3 is on schedule for delivery in late 2015, it added.

AVN.L is currently trading at 276.42 pence, up 24.92 pence or 9.91 percent, on a volume of 937,532 shares.

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by RTT Staff Writer

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