Telesat Reports Results for the Second Quarter

 

August 2, 2012

Telesat Holdings Inc. announced its financial results for the three and six month periods ended June 30, 2012. All amounts are in Canadian dollars and are reported under International Financial Reporting Standards (“IFRS”) unless otherwise noted.

For the three month period ended June 30, 2012, Telesat reported consolidated revenues of $202 million, an increase of approximately 1% ($1.5 million) compared to the same period in 2011. When adjusted for foreign exchange rate changes over the period, revenue decreased by 1% ($1.4 million) compared to the same period in 2011. For the six month period ended June 30, 2012, consolidated revenues were $398 million, a decrease of approximately 1% ($5 million) compared to the same period in 2011. When adjusted for foreign exchange rate changes, revenues decreased by 2% ($9 million) compared to the same period in 2011.

Adjusted EBITDA1 for the second quarter of 2012 was $156 million, an increase of 1% ($1 million) compared to the second quarter of 2011 and a decrease of 1% ($0.9 million) when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin1 of 77% for the second quarter remained unchanged compared to the same period in 2011. For the six month period ended June 30, 2012, Adjusted EBITDA was $309 million, a decrease of 1% ($3 million) over the same period of 2011 and a decrease of 2% ($6 million) when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin for the first half of 2012 remained unchanged at 77% compared to the same period in 2011.

For the second quarter and first half of 2012, revenue and Adjusted EBITDA were adversely affected by a previously disclosed contractual rate reduction on one of Telesat’s Direct-to-Home (DTH) satellites, largely offset by growth from Telesat’s North American and international satellite fleet.

Telesat reported a net loss of $243 million in the second quarter compared to net income of $22 million for the same period in 2011. A significant portion ($216 million) of the second quarter loss was related to the refinancing of Telesat’s 11% Senior Notes: a $162 million non-cash loss related to a prepayment option and $54 million in expenses relating to the write off of certain deferred financing costs as well as tender and redemption premiums paid to the 11% Senior Noteholders. The net loss was $144 million for the first six months of 2012 compared to net income of $137 million for the same period in 2011.

“I am pleased with our financial and operating performance in the second quarter,” commented Dan Goldberg, Telesat’s President and CEO. “Notwithstanding the significant contracted reduction in revenue from one of our Direct-to-Home satellites, revenue and Adjusted EBITDA were in line with 2011 results. We successfully launched and brought into service our Nimiq 6 satellite toward the end of the quarter and, as a result, expect meaningful growth in both revenue and Adjusted EBITDA in the second half of this year relative to the first half. We also refinanced our 11% senior notes in the quarter with new notes at a substantially lower interest rate. Lastly, we made continued progress on the construction of the Anik G1 satellite, which we expect to launch toward the end of this year. In light of the investments we are making in our new satellites and our industry-leading contractual backlog, we remain well positioned to grow going forward.”