Telesat Achieves Strong Growth in the Third Quarter and First Nine Months of 2010
November 4, 2010
Telesat Holdings Inc. announced its unaudited financial results for the three and nine month periods ended September 30, 2010. Unless otherwise stated herein, all amounts are in Canadian dollars.
For the three month period ended September 30, 2010, Telesat reported consolidated revenues of $209 million, an increase of approximately 12% ($23 million) compared to the same period in 2009. When adjusted for changes in foreign exchange rates over the period, revenue increased by 14% compared to the same quarter in 2009. The year over year increase was primarily the result of increased revenues from Nimiq 5 and Telstar 11N.
Operating and cost of equipment sales expenses of $50 million were 15% ($8.8 million) less than the same period in 2009, or 13% less when taking into account changes in foreign exchange rates. Adjusted EBITDA1 for the third quarter of 2010 was $160 million, an increase of 24% ($31 million) compared to the third quarter 2009 and an increase of 26% when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin1 for the third quarter was 77%, compared to 69% in 2009.
Telesat reported a profit of $79 million in the third quarter compared to a profit of $203 million for the same period in 2009. Between the end of the second and the end of the third quarter of 2010, the Canadian dollar strengthened against the U.S. dollar by 3 cents, creating foreign exchange gains. However, a larger gain was recognized in the third quarter of 2009 because the Canadian dollar strengthened by 7 cents against the U.S. dollar. Therefore, during the third quarter of 2010, the foreign exchange gain related to the conversion of the U.S. dollar denominated debt combined with the loss on financial instruments resulted in a non-cash gain of $55 million, compared to a non-cash gain of $178 million for the same period in 2009.
For the nine month period ended September 30, 2010, consolidated revenues were $614 million, an increase of approximately 4% ($22 million) compared to the same period in 2009. When adjusted for foreign exchange rate changes, revenue increased by 9% compared to the same period of 2009. Adjusted EBITDA was $467 million, an increase of 12% ($51 million) over the same period of 2009 and an increase of 18% when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin was 76% and net income was $87 million for the first nine months of 2010, compared to 70% and $351 million, respectively, in the prior period.
“I am very pleased with our strong performance in the third quarter and first nine months of this year,” commented Dan Goldberg, Telesat’s President and CEO. “Compared to the same period last year, we experienced meaningful growth in revenue, substantial reduction in expenses, significant growth in Adjusted EBITDA and a pronounced expansion in our Adjusted EBITDA margin. In addition to the robust financial performance, we completed an important agreement with Astrium’s Paradigm Services for the full X-band payload on the Anik G1 satellite. In light of our strong financial performance through the third quarter, the investments we are making in expansion satellite capacity (a substantial amount of which is already under contract with customers for the life of the satellites), and our industry-leading contractual backlog, we anticipate achieving record levels of revenue and Adjusted EBITDA this year and continued strong growth in the years ahead.”
