Telesat Holdings Inc. reported on Thursday a US$ 206 million (Ca$ 210) decrease in profitability, which the company blamed on a large one-time insurance claim it received last year.
Reporting its full-year financial results, the Ottawa maker of broadcast satellites said revenues for 2012 rose 5% to US$830.65 million (Ca$846 million), compared to the US$794.32 million (Ca$809 million) it reported in 2011. Net income for the year was US$26.5 million (Ca$27 million) compared to US$232.7 million (Ca$237 million) in 2011, a decrease of US$206 million (Ca$210 million). The company said the drop was largely due to a one-time insurance payment of US$132.55 million (Ca$135 million) in 2011, which the company had to pay due to the failure of a solar array on one of its satellites.
Telesat said revenue growth was driven, in part, by the successful deployment of the Nimiq 6 satellite in the second quarter of 2012 and a full year of revenue from the Canadian payload on the ViaSat-1 satellite, which entered commercial service in December 2011. Operating expenses of US$240.5 million (Ca$245 million) were 31% US$56.9 million (Ca$58 million) higher than in 2011 or 30% (US$55.9 million or Ca$57 million) higher because of changes in foreign exchange rates. Adjusted EBITDA was US$644 million (Ca$656 million), an increase of 5% (US$32.4 million or Ca$37 million) over 2011. The company’s adjusted EBITDA margin for 2012 was 78% compared to 77% for 2011.
For the three month period ended December 31, 2012, Telesat posted consolidated revenues of US$223.8 million (Ca$228 million), an increase of approximately 11% (US$22.58 million or Ca$23 million) compared to the same period in 2011. When adjusted for foreign exchange rate changes over the period, revenue increased by 13% (US$26.5 million or Ca$27 million) compared to the same period in 2011, driven by Nimiq 6 and the Canadian payload on ViaSat-1. Operating expenses in the quarter were US$59.8 million (Ca$61 million), or an increase of US$11.78 million (Ca$12 million) compared to 2011.
Adjusted EBITDA for the fourth quarter of 2012 was US$169.9 million (Ca$173 million), an increase of 10% (US$15.7 million or Ca$16 million) compared to the fourth quarter of 2011 and an increase of 12% (US$18.6 million or Ca$19 million). The Adjusted EBITDA margin was 76% for the fourth quarter compared to 77% for the same period in 2011.
Dan Goldberg, Telesat President and CEO, said that compared to 2011, the company experienced meaningful growth in revenue and adjusted EBITDA as well as continued expansion of our Adjusted EBITDA margin. He also reported that during the year, Telesat refinanced its debt, brought our new Nimiq 6 satellite on line, and completed construction of Anik G1 satellite.
“Anik G1, which we expect to be launched in the first half of this year, has considerable expansion capacity, a significant portion of which is already contracted for the life of the satellite,” Goldberg said.
Anik G1's 16 extended Ku-band transponders have been contracted for 15 years to Shaw Direct for DTH services in Canada. Telesat also has entered into a 15 year contract with Paradigm Services for the full X-band payload of three transponders for government services. Anik G1 is expected to double Telesat's existing capacity in South America from the 107.3 degree West orbital location.
