Telesat Reports Results for the Third Quarter Ended September 30, 2013

 

October 31, 2013

 

Telesat Holdings Inc. (“Telesat”) today announced its financial results for the three and nine month periods ended September 30, 2013. All amounts are in Canadian dollars and are reported under International Financial Reporting Standards (“IFRS”) unless otherwise noted.

 

For the quarter ended September 30, 2013, Telesat reported consolidated revenues of $238 million, an increase of approximately 8% ($18 million) compared to the same period in 2012.  Revenue growth was principally the result of revenue earned on the Anik G1 satellite, which entered into commercial service in May 2013, and the provision of short-term satellite services to another satellite service provider. Operating expenses of $52 million were 4% ($2 million) higher than for the same period in 2012 related primarily to an increase in non-cash stock based compensation expense arising from additional stock options granted in 2013, partially offset by expenses incurred in relation to special payments made in 2012.  Adjusted EBITDA1 was $192 million, an increase of 10% ($17 million) over the same period in 2012. The Adjusted EBITDA margin1 for the third quarter of 2013 was 81%, compared to 80% in the same period in 2012. 

 

For the nine month period ended September 30, 2013, consolidated revenues were $673 million, an increase of approximately 9% ($55 million) compared to the same period in 2012. The increase was primarily the result of the addition of the Nimiq 6 satellite in mid-2012, the addition of the Anik G1 satellite in May 2013, the provision of short-term satellite services to another satellite service provider, and higher equipment sales. The increase in revenue was offset principally by a decrease in revenue earned on Telesat’s Nimiq 1 satellite.  Operating expenses were $151 million, a decrease of 18% ($34 million) compared to 2012 related primarily to compensation expense associated with the special payments made in 2012. The Adjusted EBITDA margin1 for the first nine months of 2013 was 79%, compared to 78% for the same period in 2012. 

 

Telesat’s net income for the quarter was $102 million compared to net income of $114 million for the quarter ended September 30, 2012. The unfavorable variation was primarily due to a lower non-cash gain on foreign exchange, which was principally a result of the U.S. dollar strengthening during the quarter relative to the Canadian dollar and thus adversely impacting the translation of Telesat’s U.S. denominated debt into Canadian dollars. The unfavorable variations were partially offset by increased revenue, a decrease in the loss on changes in the fair value of financial instruments and lower interest expense due to refinancing activities. 

 

For the nine month period ended September 30, 2013, net income was $20 million, compared to a net loss of $31 million in 2012. Results were favorably impacted by an increase in revenue, lower operating expenses, reduced losses on refinancing and by non-cash gains on changes in the fair value of financial instruments. These positive variations were partially offset by non-cash losses on foreign exchange related to the translation of Telesat's U.S. denominated debt into Canadian dollars.

 

“I am very pleased with the strong growth in revenue and Adjusted EBITDA we achieved in the third quarter and first nine months of the year compared to the same periods last year,” commented Dan Goldberg, Telesat’s President and CEO. “In light of our favorable performance year to date, the recent entry into service of our Anik G1 satellite, and our industry-leading contractual backlog, we are well positioned to continue to grow our business this year and beyond.”