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Telesat Reports Results for
the Quarter Ended September 30, 2015
October 29, 2015
Telesat Holdings Inc. announced its financial results for the
three and nine month periods ended
September 30, 2015. All amounts are in Canadian dollars and are
reported under International Financial Reporting Standards
("IFRS") unless otherwise noted.
For the quarter ended September 30, 2015, Telesat reported
consolidated revenue of $242 million, an increase of $14 million
compared to the same period in 2014. During the quarter, the
U.S. dollar was 19% stronger than it was during the third
quarter of 2014, resulting in a positive impact on the
conversion of U.S. dollar denominated revenue and a negative
impact on the conversion of U.S. dollar denominated expenses.
When adjusted for foreign exchange rate changes, revenue
decreased by 1% ($3 million) compared to the
same period in 2014. The decrease in revenue, which was
principally from the energy and resource industries, was
partially offset by an increase in revenue earned during the
quarter from short term services provided to another satellite
operator.
Operating expenses of $44 million were 10% ($5 million) lower
than the same period in 2014 or 16% ($8 million) lower when
taking into account changes in foreign exchange rates. The
decrease was related to lower share-based compensation expense,
lower bad debt expense and lower cost of equipment
sales. Adjusted EBITDA1 was $198 million, an increase of 9%
($16 million) compared to the same period in 2014, or an
increase of 1% ($2 million) when adjusted for foreign exchange
rate changes. The Adjusted EBITDA margin1 was 81.9% for the
third quarter of 2015 compared to 79.9% for the same period in
2014.
For the nine month period ended September 30, 2015, consolidated
revenue was $698 million or $3 million higher compared to the
same period in 2014. During the first nine months of 2015, the
U.S. dollar was 15% stronger than it was during the first nine
months of 2014. When adjusted for foreign exchange rate
changes, revenue decreased by 5% ($36 million) compared to the
same period in 2014. The decrease was due to a reduction in
short-term services provided to other satellite operators in the
first nine months of 2015 compared to the first nine months of
2014, as well as lower revenue from the energy and resource
industries and certain international markets. Operating expenses
were $133 million, a decrease of 6% ($9 million) compared to the
first nine months of 2014 or 11% ($16 million) lower when
adjusted for foreign exchange rate
changes. The largest contributors to the operating expense
reduction were lower shared-based compensation expense and lower
cost of equipment sales, with the balance due to lower expenses
in other areas. Adjusted EBITDA1 was $570 million, an increase
of 1% ($7 million) compared to the same period in 2014, or a
decrease of 4% ($25 million) when adjusted for foreign exchange
rate changes. The Adjusted EBITDA margin1 for the first nine
months of 2015 was 81.6%, compared to 81.0% in the same period
in 2014.
Telesat's net loss for the quarter ended September 30, 2015 was
$139 million compared to a net loss of $41 million for the same
period in 2014. Results were positively impacted by higher
operating income and lower interest expense; however, these
positive impacts were more than offset by the negative impact of
the weaker Canadian dollar on the translation of Telesat's U.S.
dollar denominated debt into Canadian dollars, changes in the
fair value of financial instruments, and higher tax expense.
For the nine month period ended September 30, 2015, the net loss
was $237 million, compared to net income of $39 million for the
same period in 2014. The reduction in net income for the first
nine months was principally the result of non-cash losses on
foreign exchange arising from the translation of Telesat's U.S.
dollar denominated debt into Canadian dollars.
"Telesat had a solid third quarter notwithstanding weakness in
certain markets we serve", commented Dan Goldberg, Telesat's
President and CEO. "Although revenue grew on a reported basis
relative to the third quarter last year, it declined 1% after
taking foreign exchange rate changes into account. Nonetheless,
we achieved a reduction in operating expenses, a slight increase
in Adjusted EBITDA1, an expansion of our Adjusted EBITDA margin1,
and continued to generate a significant amount of cash from our
operating activities. Looking ahead, we anticipate the launch of
the Telstar 12 VANTAGE satellite, to take place toward the end
of next month."
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