Avanti Communications Group PLC (AIM: AVN) (“Avanti” or the “Company”), a leading provider of satellite data communications services in Europe, the Middle East and Africa, issues the following update on financing and trading.

The Company recently announced that it was considering options to re-finance its Super Senior Facility, due to mature in June 2020. At the same time, the Company will also consider increasing the new facility in the range of $225 to $250 million in order to complete certain capital projects and to provide additional working capital.

As part of this process, the Company provides the following update:

HYLAS 4 was brought into service in late 2018 and has some early stage customers including on two of the four steerable beams. The Company has also deployed one of its steerable beams on HYLAS 4 over Mozambique to assist humanitarian efforts following the recent typhoon and flooding.

HYLAS 3 is in the final stages of preparation for launch which is due in Q3 2019. The Company anticipates bringing this 4GHz payload into service during Q4 2019.

Customers on HYLAS 1 have been successfully migrated onto HYLAS 4. HYLAS 1 is currently undertaking two specific short-term bandwidth projects for wholesale customers, which will occupy most of the remainder of 2019. After this time the capacity on HYLAS 1 will be fully utilised by a single wholesale customer, previously announced.

Steady progress continues with HYLAS 2 sales and the Company expects to make further contract announcements over the coming months.

Outlook

2018 saw a resetting of the shape of the balance sheet and the strategic direction of the business. With the balance sheet restructuring completed in April 2018, the business refined its strategy to focus on Wholesale, Government and Cellular backhaul opportunities. This bore fruit in the second half of the year with over $100 million of long term bandwidth contracts signed. Bandwidth revenues for the 12 months ended 31 December 2018 are expected to be approximately $32 million. This excludes low margin project and equipment revenues. Bandwidth revenues are forecast to increase by 125% in 2019 and at least a further 40% in 2020. The growth is anticipated to come from Government business on HYLAS 4 and HYLAS 3, once operational. Underlying costs of delivering bandwidth is around $80 million. However, the Company has instigated a cost optimisation project, which is expected to reduce the costs associated with bandwidth sales by at least 15% per annum by 2020. These measures should result in a positive EBITDA from the bandwidth business in 2019, with further material growth in 2020.

This announcement contains inside information.

For further information, please contact:

Avanti Communications: Nigel Fox Tel: +44 20 7749 1600
Cenkos Securities (Nomad): Max Hartley/Katy Birkin Tel: +44 207 397 8900
Newgate Communications: Ralph Anderson +44 (0)20 3757 6883

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