Gilat Satellite Networks Ltd. (NASDAQ:GILT) Q3 2019 Earnings Conference Call - Final Transcript

Nov 19, 2019 • 09:30 am ET

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Gilat Satellite Networks Ltd. (NASDAQ:GILT) Q3 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. Ladies and gentlemen, at this time, we'll begin the question-and-answer session. [Operator Instructions] First question is from Gunther Karger from Discovery Group. Gunther, please go ahead.

Analyst
Gunther Karger

Yeah. So good morning or good afternoon. I don't have a question. I just have a statement. Congratulations on doing excellent work. Thank you.

Executive
Yona Ovadia

Thank you, Gunther.

Operator
Operator

Thank you, Gunther. Next question is by Michael Hebner of McNally Financial. Michael, please go ahead. Michael, Sorry.

[Technical Issue] I'm sorry there seems to been an issue. [Operator Instructions] Next question is by Michael Hebner. Michael Hebner, please go ahead.

Analyst
Michael Hebner

Yes. Last year you paid a dividend or something or I've seen a dividend. Is there any plan of future dividends because I see that's one of the reasons why your cash went down $24 million?

Executive
Adi Sfadia

Yeah. Indeed in early Q2 we paid 25 -- close to $25 million the dividend. The dividend was declared as a special dividend. We haven't yet adopted ongoing policy for dividend payment. So now, I don't know what will happen next year.

Analyst
Michael Hebner

Yeah. I was disconnected from the call. Have you guys given guidance for what's the -- what are we looking at for 2020? When are we going to see some numbers on that?

Executive
Adi Sfadia

So in general -- now we started to work on our 2020 annual operating plan and budget. So it's too early to provide a guidance to the market. All I can say is that we expect to see the same EBITDA growth that we saw in the last few years on average.

Analyst
Michael Hebner

Now the mPower, you said that we're not going to receive revenue on that for two years or it's not operational. Could you put some more color around that?

Executive
Adi Sfadia

Yeah. In general, the satellites are going to be launched in about two years. And in the meantime we have some development to do. So once the satellite will be up in the air we will need to provide a ground equipment to support it.

Analyst
Michael Hebner

Okay. Now the Peru, what kind of re-occurring revenue are we expecting to get out of there and when do we expect that to really start to launch?

Executive
Adi Sfadia

So, in Peru we won $550 million of projects. About two-third is onetime construction revenues and about $220 million are operational revenues. Yearly maintenance for a period of 10 years for the entire six [Phonetic] projects together. So that's gives you about a yearly run rate of $22 million. In addition, we have about $10 million to $12 million of recurring revenue for managed service, mainly satellite business that we provide today. In addition, we started to sell services over the network. We recently announced a $10 million deal with one of the network operator in Peru. That gives more than $2 million a year. And actually we expect this more than double or even triple within few years, because its initial order for a few 100 sites. We expect them both to increase the size and to buy more