Musabbeh Al Kaabi, Chairman of Yahsat. Image courtesy: Yahsat

Al Yah Satellite Communications Company PJSC (“Yahsat” or the “Group”), the UAE’s flagship satellite solutions provider listed on the Abu Dhabi Securities Exchange (“ADX”, symbol: YAHSAT, ISIN: AEA007501017), announced that its government services arm, Yahsat Government Solutions (“YGS”), has received an Authorization to Proceed (“ATP”) from the UAE Government (the “Government”) to provide satellite capacity and managed services for 17 years. This mandate, worth AED 18.7 billion (USD 5.1 billion), consolidates associated operations, maintenance, and technology management services for ground segment satellite systems and terminals that were formerly delivered under a separate contract.

The mandate will take the place of two existing agreements, the Capacity Services Agreement (“CSA”) and the Managed Services Mandate (“MSM”), which expire in November and December 2026, respectively. Yahsat will provide the government with secure and reliable satellite capacity and related managed services under the new mandate, using the Al Yah 1 and Al Yah 2 satellites currently in orbit, as well as two new satellites, Al Yah 4 (“AY4”) and Al Yah 5 (“AY5”), which are scheduled to launch in 2027 and 2028, respectively.

The mandate reinforces Yahsat’s long-standing and unique relationship with the Government, dating back almost two decades since the company’s inception, highlighting its critical role as the preferred and trusted partner to the Government for the supply of secure satellite capacity and solutions. It also significantly increases the Group’s contracted future revenues to AED 25.7 billion (USD 7.0 billion), over 16 times its 2022 annual revenues, extending backlog well beyond 2040 and providing security and visibility over its future cash flows.

In June 2023, Yahsat signed an Authorization-to-Proceed (“Airbus ATP”) with Airbus for the building of AY4 and AY5. This protects the program schedule and allows some operations, such as system requirements review, design development, and long-lead item procurement, to begin. Yahsat’s own resources as well as other prospective funding possibilities are being considered for the AY4 and AY5 purchase, which will include spacecraft, ground segment infrastructure, launch, and insurance. Furthermore, the award includes a USD 1 billion advance payment from the government, which will be collected in 2024.

Commenting on this key milestone, Musabbeh Al Kaabi, Chairman of Yahsat, said: “We are honoured to secure the continued trust of the UAE Government to provide critical, secure communication services for a further 17 years beyond 2026. This award is a testament to our long-standing relationship with the Government and the quality of service that we provide as we continue to strive to consistently exceed customer expectations. By complementing our existing fleet with Al Yah 4 and Al Yah 5 next generation satellites, we will be able to serve the government with new cutting-edge solutions that are not currently possible. The performance of the new satellites is expected to significantly surpass current industry capabilities including capacity, coverage and flexibility allowing us to offer a wide range of next generation applications to our end user. We are excited by this new journey and look forward to serving our customer with true operational excellence.”

From his side, Ali Al Hashemi, Group Chief Executive Officer at Yahsat, said: “We are delighted to receive this mandate, which allows us to continue to provide capacity and related services to the UAE Government beyond 2026 using our current satellite fleet, and beyond 2040 on two new satellites, which are already under construction. This is a new chapter in Yahsat’s momentous journey serving the satellite communications requirements for the UAE Government.

The AED 18.7 billion [USD 5.1 billion] mandate positions Yahsat for sustainable future growth, alongside other ambitious projects in the pipeline. Our financial position has never been stronger and we now enjoy a contracted revenue backlog of AED 25.7 billion [USD 7.0 billion] or over 16 times annual revenues based on backlog figures at the end of the second quarter. Representing one of the largest backlog multiples and strongest balance sheets in the industry, we remain optimistic about providing a broader, more diverse and cutting-edge solutions portfolio to both the government and our customers.”