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Daily news  
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Telesat Reports Results for
the Quarter and Nine Months Ended September 30, 2022 November, 8, 2022 Telesat announced its financial
results for the three “We remain on track to
outperform the financial guidance we gave at the
outset of this year and are pleased with our
performance year to date,” commented Dan Goldberg,
Telesat’s President and CEO. “Our revenue and
Adjusted EBITDA1 are, as anticipated, lower relative
to the prior period as a result principally of the
reduction in a North American direct-to-home
television customer contract renewal earlier in the
year. Telesat’s business continued to generate
strong cash flow, Goldberg added: “In the quarter
we progressed discussions with our suppliers and
financing We continue to believe that we
will have greater clarity on the financing of the
program around year end and that Telesat Lightspeed
represents a transformative growth opportunity for
the company and a highly compelling value
proposition for the communications enterprise user
community.” For the quarter ended September
30, 2022, Telesat reported consolidated revenue of
$180 million, a decrease of 6% ($12 million)
compared to the same period in 2021. When adjusted
for changes in foreign exchange rates, revenue
declined 8% ($16 million) compared to 2021. The
revenue decrease was primarily due to a reduction on
renewal of a long-term agreement with a North
American DTH customer and, to a lesser extent,
revenue from short-term services provided to another
satellite operator in 2021 that did not recur in
2022. This was partially offset by higher revenue
from mobility customers and the NASA Communications
Services Project (CSP) program. Operating expenses for the
third quarter were $56 million, a decrease of 7% ($4
million) from the same period in 2021. When adjusted
for changes in foreign exchange rates, operating
expenses Adjusted EBITDA1 for the third
quarter was $137 million, a decrease of 12% ($19
million) or, when adjusted for foreign exchange
rates, a decrease of 14% ($22 million). The Adjusted
EBITDA margin1 was 76.0%, compared to 81.1% in the
same period in 2021. Telesat’s net loss for the
third quarter was $229 million, compared to a net
loss of $52 million for the third quarter of 2021.
The negative variation of $176 million was
principally due to a higher non-cash foreign
exchange loss arising from the translation of
Telesat’s U.S. dollar denominated debt into Canadian
dollars compared to the same period in the prior
year. This loss was primarily a result of the U.S.
dollar strengthening to a greater degree in the
three-months ended September 30, 2022 compared to
the same period in the prior year. For the nine-month period ended
September 30, 2022, Telesat reported consolidated
revenue of $552 million, a decrease of 3% ($18
million) compared to the same period in 2021. When
adjusted for changes in foreign exchange rates,
revenue declined 5% ($26 million) compared to 2021.
The revenue decrease was primarily due to a
reduction on renewal of a long-term agreement with a
North American DTH customer and, to a lesser extent,
revenue from short-term services provided to another
satellite operator in 2021 that did not recur in
2022. This was partially offset by higher revenue
from mobility customers and higher revenue
associated with the Defense Advanced Research
Projects Agency (DARPA) and NASA CSP programs. Operating expenses for the
nine-month period ended September 30, 2022 were $179
million, an increase of $14 million from 2021. When
adjusted for changes in foreign exchange rates,
operating expenses increased by $13 million compared
to 2021. The increase was primarily due to higher
non-cash share-based compensation issued in 2021 and
2022, combined with higher wages and higher expenses
(including insurance) associated with becoming a
public company. This was partially offset by the
impact of accelerated expense recognition from stock
options cancelled in the second quarter of 2021. Adjusted EBITDA1 For the nine-months ended
September 30, 2022, Telesat’s net loss was $172
million, compared to net income of $42 million for
the same period in 2021. The negative variation of
$215 million was principally due to a non-cash
foreign exchange loss compared to a non-cash foreign
exchange gain for the same period in the prior year,
arising from the translation of Telesat’s U.S.
dollar denominated debt into Canadian dollars
primarily as a result of the U.S. dollar
strengthening in the nine-months ended September 30,
2022 as opposed to weakening in the same period in
the prior year. This loss was partially offset by a
gain on extinguishment of debt. 2022 Financial Outlook • Telesat continues to expect
its full year 2022 revenues (assuming a foreign
exchange rate of US$1 = C$1.30) to be between $740
million and $750 million. • Telesat continues to expect
its Adjusted EBITDA1 • For 2022, Telesat now expects
its cash flows used in investing activities to be in
the range of US$50 million to US$75 million.
(Previously between US$100 million to US$120
million). Once Telesat has finalized arrangements
around the construction and financing of its Telesat
Lightspeed program, it will provide a further update
on the anticipated capital expenditures for the
year. Business Highlights ▲ At September 30,
2022: (excluding contractual backlog
associated with Telesat Lightspeed). - Fleet utilization was 87%.
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