Eutelsat: share falls on Moody's downgrade

(CercleFinance.com) - Moody's announced on Tuesday that it had downgraded Eutelsat's credit rating to 'B2' from 'Ba3', mainly due to the disappointing contribution of the OneWeb acquisition.


Moody's explains that this downgrade reflects the satellite operator's persistent operational underperformance in comparison with the forecasts it was able to establish.

The agency specifically mentions the lower-than-expected contribution of the British company OneWeb, a business acquired in 2022 on the basis of an estimated valuation of $3.4bn.

Moody's adds that this also takes into account Eutelsat's reduced visibility regarding its ability to return to earnings growth, but also the pressure on its cash flow due to high capital expenditure and the prospect of significant refinancing up to 2027 at a time when borrowing costs are rising significantly.

Following this downgrade, Moody's no longer has a 'negative' outlook on the group's credit rating, but a 'stable' outlook, explaining that it hopes that the group's operating performance will stabilize in 2026, with the help of OneWeb, before a possible turnaround in the accounts in 2027.

Following these comments, Eutelsat's share price closed 4.4% on Tuesday, returning to the historic lows reached last week.


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