SES Weighs Resuming Buybacks in 2014 as Cash Improves

SES SA (SESG), the world’s largest publicly traded satellite operator, is considering a resumption of share buybacks as soon as 2014 when slowing spending will allow it to use cash for repurchases, its chief executive officer said.

“Now we have a lot of investments but in two or three years if we have cash flows building up again there will be financial headroom again and then we can do share buybacks,” CEO Romain Bausch said today in an interview at a conference organized by Morgan Stanley in Barcelona.

SES, which has 52 satellites and is adding capacity to accommodate demand, suspended repurchases after buying back and canceling shares valued at about 2 billion euros ($2.5 billion) from 2006 to 2011. The Luxembourg-based company, whose customers include Spain’s biggest phone company Telefonica SA (TEF), also paid dividends of about 1.5 billion euros during that period.

The company expects earnings will grow steadily over the next few years, Bausch said. “That’s why the gross dividend can also grow 10 percent year on year,” he said, while ruling out any one-time payouts.

“Most of the growth is coming from emerging markets such as Latin America, Asia and Africa,” he said. SES could also boost growth by acquiring a small satellite company, while it’s not considering any asset disposal to raise cash in the near term, Bausch said.

To contact the reporter on this story: Manuel Baigorri in Barcelona at mbaigorri@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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