Yahsat plans further acquisitions as it expands into the IoT market

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Al Yah Satellite Communications, better known as Yahsat, is seeking potential acquisition opportunities worldwide in the Internet of Things (IoT) sector following its investment in eSat Global, a connectivity solutions provider US-based IoT, says senior executive.

The UAE-based satellite solution provider is in talks with several start-ups operating in the IoT sector, said Sulaiman Al Ali, chief commercial officer of Yahsat. The National in an interview.

“We are very actively studying the market and looking at what new opportunities arise,” he said.

The acquisition of eSat Global is the “first step towards realizing Yahsat’s IoT strategy, and it is our main ambition to be a major player in the IoT market”.

The global IoT market is expected to grow at a compound annual rate of 22% over the next five years to reach $525 billion, and the satellite IoT business is expected to generate a cumulative revenue of $6 billion. over the same period, according to Yahsat.

Currently, start-ups around the world are identifying opportunities in different segments of the IoT market, Mr. Al Ali said.

“We are really studying these companies. We are actively interacting with them, either directly or through some of the shows we attend. So the strategy is there, and we are really studying it. [the market]and when the right opportunity arises, we will be there.”

In terms of market opportunities, segments such as smart agriculture, environmental monitoring, digital marine tracking, and cold chain are some of the areas that require IoT solutions.

While eSat has submitted proofs of concepts, Yahsat, as part of the investment, aims to have commercially viable solutions by Q4 2023.

The acquisition offers a solid financial return and “the growth outlook is really good,” said Mr. Al Ali.

“Some of the solutions will have an immediate requirement in the market…like the oil and gas segment – they have a lot of monitoring requirements. And we have the requirement that comes from the cattle,” he said .

Mr. Al Ali cited an example of farms in Australia, where there is a need to tag livestock and track their location as well as biometrics.

Apart from IoT, Yahsat has also identified strong market potential in the government segment – ​​which is “growing” both in the UAE and internationally, as well as in the maritime segment, where it has already had a lot of success”.

The company is also working on the Thuraya 4 Next Generation (T4-NGS) satellite, which is scheduled to launch next year and begin commercial services in the second half of 2024.

“[With the satellite] we will add a lot to the industry because we are coming in with a capability that has never been available in the mobile satellite industry before.”

Looking ahead, despite warnings of slowing economic growth around the world, Yahsat – which offers multi-mission satellite services in more than 150 countries – is confident that it will continue to grow.

Yahsat raised its forecast revenue for 2022 by 1.3% at the end of the first half of 2022 to at least Dh1.54 billion ($419 million) from the earlier forecast of Dh1.52 billion , keeping the upper limit unchanged at MAD 1.62 billion.

The Abu Dhabi-listed company’s first-half revenue amounted to 755 million dirhams, up more than 8% compared to the same period last year. Net profit attributable to shareholders for the six-month period was MAD 167 million, up more than 50% compared to the same period in 2021.

“If we think about the journey of the company as a whole, our business is resilient and the global macroeconomic effect of inflation and volatility…we haven’t seen the effect of that,” Al said. Ali.

The indexation of its longer-term and major contracts has ensured that fluctuations caused by inflation do not affect the profitability of the projects. The company’s debt is also at a fixed rate, so it is not affected by market volatility.

Yahsat has also not seen an increase in its operational expenditure so far.

“The majority of G&A [general and administrative expenses] comes from personnel and other costs, and we believe this will continue to be sustained until the end of the year,” Mr. Al Ali said.

“We see a lot of changes, a lot of geopolitical things happening in the world. It will have impacts that we have to study. So I think we are aware, we are prepared and we are a very agile company that can easily maneuver around these obstacles.”

Updated: October 13, 2022, 05:44

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