Embarking on a Journey into Space, Backed by Teleport Profits

Newsat shareholders reach a key milestone on July 23, when they are asked to vote at an EGM to approve the conditional placement to sophisticated and wholesale investors of sufficient shares to raise some US$200m to complete the required funding for the Jabiru-1 Satellite project.

With the market capitalisation of NWT's 232.4m shares around $160m at 69¢ on 19 July, retail shareholders will be diluted to less than half their percentage shareholding - but the new funds are an essential ingredient to the Jabiru project and the placement is considered the most effective way of raising the funds.

Assuming success at the meeting and in the placement, Newsat will have made a critical leap towards implementing its transformational satellite program and should be in a position to build and launch Jabiru-1. While still speculative it will have a much larger equity base that should increase its capacity to obtain future equity for development of additional satellites including Jabiru-3 and Jabiru-4.

On 18 June 2012, Newsat announced that the board of The Export-Import Bank of the United States had approved a referral to US Congress of a ~US$280 million direct loan for the Jabiru-1 Satellite project. Following a 35 day Congressional notification and comment period, this is eligible for a final vote on approval. Newsat also announced that approval by COFACE for a ~US$95 million COFACE-backed debt facility is expected in the coming weeks. The Ex-Im Bank loan and COFACE-backed debt facility will be subject to a number of conditions, including completion of an equity capital raising of ~US$200 million, to complete the required funding for the project.

Shareholders and other interested investors are encouraged to study the Newsat releases of 18 and 19 June, and other background information. The placement will be arranged by Morgan Stanley and E. L & C. Baillieu at a price no less than 80% of the 5-day VWAP before the bookbuild.

Half-year Performance & Estimates - NWT

Year-end June	1H12A	FY12A	1H13A	FY13A	1H14A	FY14E	FY15E
Sales, $m	17.2	37.2	20.4	39.2	16.6	31.0	33.0
EBITDA, $m	1.3	3.8	2.2	3.4	-0.98	-4.5	-1.6
EBIT, $m	0.50	2.2	1.3	1.8	-1.7	-5.8	-3.1
Report NPAT, $m	0.50	2.3	1.4	1.9	-1.6
Adj. NPAT, $m					-1.6	-5.9	-6.1
Reported EPS, ¢	0.00	1.00	1.00	0.00	0.00
Adjusted EPS, ¢					0.00	-0.80	-0.80
EPS %FY/Growth	0%		****%	-100%	-100%	****%	0%
Dividend, ¢	0	0	0	0	0	0.00	0.00
Franking, %	-	-	-	-	-	-	-
EBITDA Margin	0	10%	11%	9%	-6%	-14.5%	-4.8%
NPAT Margin	0	6%	6%	5%	-10%	-19.0%	-18.5%
ROE, %	0	4%	2%	1%	-1%
EBIT/Interest	0.0	-29.5	-61.5	-23.1	23.76
Net Debt / Equity	0	0.09	0.19	-0.39	-0.01
CashFlow/Sh, ¢	1.0	2.5	2.1	1.9	-0.3	-0.90	-0.80
Y/E Shares, m	187.5	233.1	233.1	539.6	591.5

Notes

Data sourced from IRESS Market Technology Limited. EPS Growth compared with the pcp is shown in most columns except the first half years which show their percentage of full year EPS. In a handful of cases, unadjusted share splits, or changes between positive and negative values, may give strange changes in ratios.

Recent News Highlights

As at 19/06/2012 : see details at www.newsat.com   (new window? Shift+Click)

19/06/2012     Notice of General Meeting - Placement of Shares to raise ~US$200m

18/06/2012     Achieves Significant Financing Milestone for Jabiru-1; Investor Update

14/06/2012     Signs US$30m Contract for Jabiru Satellite Capacity

24/04/2012     Signs $13m Contract for Jabiru Satellite

16/04/2012     Secures $7.5m from Institutional Investors

19/03/2012     Signs $32m Contract for Jabiru Satellite

14/03/2012     Finalises Launch Service Contract with Arianespace

08/03/2012     Secures Additional Orbital Slot and Frequencies

02/03/2012     NWT Added to S&P/ASX All Ordinaries Index on Quarterly Index Rebalancing

27/02/2012     Half Year Results 1H12

20/02/2012     Results of Entitlement Offer; Finalises Jabiru-2 Satellite Venture with MEASAT

03/02/2012     Signs Significant Capacity Agreement with MEASAT

19/01/2012     $7.5m of New Teleport Contracts for 1H12

20/12/2011     Announces Placement and Rights Issue

12/12/2011     Signs $67m Contract for Jabiru

08/12/2011     Signs Agreement with Arianespace for Jabiru-1 Launch; and Satellite Build Contract with Lockheed Martin

30/11/2011     Annual General Meeting and Presentation

24/10/2011     Annual Report 2011

Company Overview

NewSat’s Teleports in Perth and Adelaide were finalists in the World Teleport Association’s Awards for Excellence in 2010. Both Teleports are accredited to supply services to the Australian Department of Defence (DRSS) and are recognised as highly secure Global Access Points, supporting certified classified networks to ensure the transmission of vital and sensitive information for government clients.

NewSat is expanding its satellite capabilities with the Jabiru Satellite Program, beginning with the launch and operation of Jabiru-1, Australia’s first independently owned commercial satellite. Jabiru-1 will provide superior coverage over South East Asia, the Middle East and North Africa. Jabiru-2, also scheduled, will deliver enhanced coverage in and around Australia. NewSat has the rights to seven premium orbital slots and its fleet of next generation geostationary satellites will lead Australia’s space quest.

In FY11 Newsat showed small but improving profitable results in its Teleport business and took some crucial steps in developing the Jabiru Satellite Program.

The Teleport business has gained significant contracts across the resource, defence and military sectors. It has retained customers well and sees rising demand across oil, gas, mining, construction, government and military sectors and in telecommunications and broadcasting.

The strategy to deliver resilient long term growth and profitability is focused around the Jabiru Satellite Program. Newsat has acquired the rights to orbital slots which can provide global coverage. It has completed the design of Jabiru-1, entering into preliminary contracts with global satellite manufacturers, signed a cornerstone customer contracts on Jabiru-1, announced the Jabiru-2 payload and begun development of customers and strategic partners on further Jabiru satellites. The company has a seasoned management team with extensive experience in the satellite industry.

If 2011 was an eventful year for Newsat, hold on to your seats in 2012! Harry Potter might be at home in the swift-changing world of teleporting, but NWT is not a ride for the faint-hearted. However, the Board and management team is well experienced and its juxtaposition of fund-raising, building contracts, launch contracts, sales contracts and capacity deals has been a well-timed, professional and exciting journey along the critical path to launching and generating earnings from a state of the art wireless transmission satellite.

Meanwhile, Newsat's established teleport business continues to grow and should provide small EPS to encourage investors and bankers pending satellite incomes.

Newsat is Australia’s largest specialist satellite communications company, delivering Internet, voice, data and video communications via satellite.

With its unique-to-Australia Teleport infrastructure, NewSat provides a full range of managed satellite communication services and has established a reputation as a partner of choice for governments, corporations and private enterprises.

NewSat has the ability (with counterparties) to provide coverage to 75% of the globe; from Australia, Asia, the Middle East, Africa, across the Indian Ocean extending into Europe and across the Pacific Ocean, reaching into the West coast of the USA.