The Speedcast International Ltd (ASX: SDA) share price was trading 20% higher today as the broader market or S&P/ASX 200 (INDEXASX: XJO) trended only marginally higher.
Speedcast International is a satellite services company with operations stretching from Brisbane around to Perth. Ships, mining companies, government groups and other parties can use their services for communication.
What’s Going On With Speedcast Shares?
Last month Speedcast updated ASX investors to say that its yearly revenue grew by 17.3% to $357.6 million.
Popping the hood, Speedcast’s Maritime revenue increased by 12% to $119.3 million while its Enterprise & Emerging Markets revenue grew by 6.8% to $79.6 million. Further, Government revenue jumped 69.3% higher to $80.4 million and Energy revenue increased by 2.6% to $78.3 million.
When it came to the bottom line — profitability — Speedcast reported underlying EBITDA, which excludes a $4.6 million impact of new lease account roles, rose 3% to $62.2 million. However, underlying net profit dropped by 30% to $14.7 million.
This Rask Finance video explains EBITDA, how to calculate it and why it may or may not represent the truth:
A BIG New Shareholder
As Rask Media’s Jaz Harrison reported, after the market had closed yesterday, Mitsubishi UFJ Financial was revealed to have taken a 5.46% stake, or 13 million shares, in Speedcast.
For some investors, seeing a big institution like that on the registry might be a sign of some potential relief from the company’s falling share price — Speedcast shares are down from nearly $5 a year ago to just $1.15 today.
However, as Rask Media’s Will Donnan wrote two months ago in this article, there may be more to the story than it seems so investors would be wise to consider the risks before taking the plunge into Speedcast shares.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
Disclosure: The author of this story does not have a financial interest in any of the companies mentioned.