UPDATE 1-France-backed Eutelsat reports stronger revenue in Starlink push

Eutelsat on Friday reported better-than-expected revenue, ‌bolstered ​by efforts from France to advance plans for a European competitor to Elon Musk's Starlink, which are boosting the satellite operator as it pivots to focus on internet services. Revenue ‌for the first half of its financial year reached 592 million euros ($702 million), surpassing analysts' average forecast of 581 million euros.

Though it remained loss-making, the company reduced operating losses by 85%. Eutelsat also slashed net debt by more than half after the French ‌state, now its top shareholder, led a 1.5 billion euro rescue last year to stabilise a balance sheet ‌shaken by a declining video business and rising borrowing costs. FRANCE DRIVING PUSH TO TAKE ON STARLINK

France sees Eutelsat as Europe's only viable challenger to Starlink, given its ownership of OneWeb, the only other active satellite network in the low Earth orbit (LEO). Those satellites, folded into the group in ⁠the ​2023 merger with London-based OneWeb, are ⁠used by governments and militaries and have become strategic assets for national security. The bet is starting to show early signs of traction even ⁠as high costs persist.

Eutelsat said OneWeb's revenue jumped almost 60% and made up about a fifth of group sales, partly offsetting a ​steady decline of legacy broadcasting. Still, it must replace ageing OneWeb satellites and has secured a state-backed loan of 1 ⁠billion euros to buy 340 new Airbus spacecraft. The company is looking at projects to provide at some point satellite-to-smartphone internet services, also known as direct-to-device, ⁠CEO ​Jean-Francois Fallacher said in a post-earnings call with reporters. Asked about a request from France's foreign ministry to explore sending terminals to Iran after authorities imposed an internet blackout last month, Fallacher said Eutelsat would support the Iranian people as ⁠much as it could.

Eutelsat also cancelled a satellite order from Thales Alenia Space, saving more than 100 million euros ⁠in capital spending. The company said ⁠it would now proceed with refinancing its bonds, after last year's cash call triggered upgrades from credit rating agencies.

Shares of Eutelsat were up 6.6% by 0836 GMT, bringing their gains ‌to around 33% ‌this year. ($1 = 0.8427 euros)