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Governments turn to Eutelsat for satellite connectivity

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Company in talks with investors for new financing plan

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Outlook confirmed despite removal of Russian channels

(Adds annual comparison for revenue, CFO quotes on government

demand and financing plan, outlook, paragraphs 2, 8, 11-13)

By Gianluca Lo Nostro

May 15 (Reuters) - French satellite operator Eutelsat

met quarterly revenue estimates on Thursday, as the

European rival to SpaceX's Starlink attracted new government

customers for its OneWeb satellites.

The group's total revenue in the third quarter of the

2024-25 fiscal year that ended in March was 300 million euros

($335.46 million), a 1.9% drop from last year.

The average analyst estimate was 302 million euros in a

company-compiled poll with the lowest at 294 million euros.

Eutelsat has recently attracted governments and investors

seeking homegrown alternatives for secure satellite

communications in Europe.

It owns the world's second-largest constellation of

low-Earth orbit satellites, OneWeb, with over 600 operating

about 1,200 km (750 miles) above Earth.

Starlink has over 7,000 of the satellites in orbit and has

made deep inroads with corporate customers, which are also among

OneWeb's core markets along with governments and militaries.

Eutelsat reported a 10.2% rise in third-quarter government

services revenue, its fastest-growing business, reflecting

higher demand from non-U.S. countries for satellite-based

connectivity.

"With the current geopolitics there is interest from many

countries... Many non-aligned countries are seeking for

alternative, non-American, non-Chinese solutions," Finance chief

Christophe Caudrelier said in a post-earnings call.

Still, Eutelsat flagged a contract renewal rate of 50%,

lower than previous quarters, owing to a change within the U.S.

Department of Defense and efforts by the President Donald

Trump's administration to cut government spending overall.

"Excluding this one-off, the renewal rate would have been

(around) 70%," it said in a statement.

Caudrelier confirmed that the group is in active discussions

with potential capital providers for the upcoming financing

plan. "We are clearly looking for capital investors," he said.

The company, which unexpectedly replaced its CEO earlier

this month, confirmed its annual outlook despite a 16 million

euro revenue hit from EU sanctions requiring it to stop

broadcasting Russian channels.

($1 = 0.8943 euros)