Telesat Nets US$127.7 Million Despite Slight Drop in Revenues in 1Q 2019
Ottawa, Canada, May 2, 2019 — Telesat reported consolidated revenues of US$164.85 million (Ca$222 million) during the first quarter of 2019, a decrease of 4% or US$7.43 million (Ca$10 million) compared to the same period in 2018. But despite the drop, Telesat netted US$127.72 million (Ca$172 million) compared to a loss of US$11.14 million (Ca$15 million) in first quarter 2018.
Telesat said the decrease was due to a decrease in short-term services provided to other satellite operators, lower equipment sales to a North American customer and lower revenue from certain customers in the resource sector, partially offset by revenues from the Telstar 19 VANTAGE and Telstar 18 VANTAGE satellites, which entered commercial service in late 2018.
When adjusting for the impact of foreign exchange rate changes, revenue decreased by 6% (US$10.4 million or Ca$14 million) during the quarter ended March 31, 2019 compared to the same period in 2018.
Operating expenses of US$28.96 million (Ca$39 million) for the quarter were 3% higher (US$0.74 million or Ca$1 million) than the same period in 2018. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter was US$138.85 million (Ca$187 million); a decrease of 4% to US$5.94 million (Ca$8 million) compared to the same period in 2018. When adjusting for the impact of foreign exchange rates, Adjusted EBITDA declined by 6% to US$8.17 million (Ca$11 million). The Adjusted EBITDA margin for the first quarter of 2019 was 84.2%, compared to 83.9% in the same period in 2018.
“The first quarter of 2019 was an active one and I am pleased with both our financial and operational performance,” commented Dan Goldberg, Telesat’s president and CEO. “We signed a number of important customer contracts in the quarter, including a significant renewal for direct to home satellite services in Canada, a meaningful contract on our new Telstar 18 VANTAGE satellite for rural broadband services in Indonesia, and a range of contracts for mobility services, including our first customer contract on our planned Low Earth Orbit (LEO) satellite constellation, which is an exciting development."
"We are seeing strong demand for the disruptive, ultra low latency, broadband offering that our advanced LEO constellation will provide and, in this regard, were pleased to see the commitment by the Government of Canada in the recent 2019 Federal budget to make use of LEO satellite services to help bridge the digital divide in Canada. Looking ahead we remain heavily focused on increasing the utilization of our in-orbit satellites and executing on our key growth initiatives, particularly our LEO program,” Goldberg added.
Telesat Business Highlights for the Quarter include:
- Telesat had contracted backlog for future services of approximately $3.7 billion.
- Fleet utilization was 83% across Telesat’s fleet.
- In February 2019 Telesat signed a contract with its long-time DTH customer Shaw Communications, under which Shaw will extend its use of satellite capacity on the Anik F2 satellite and consolidate capacity it currently uses on Anik F2 with much of the capacity it currently uses on the Anik F1R satellite.
- In March 2019 Telesat signed a multi-year contract with OmniAccess, a leader in specialized maritime connectivity solutions, pursuant to which it will provide broadband services on Telesat’s planned global LEO satellite constellation.
- In March 2019 Telesat welcomed the Government of Canada’s commitment to deliver high speed Internet broadband service to all Canadians through leveraging innovative and disruptive technologies, including Low Earth Orbit (LEO) satellite constellations.
- In April 2019 Telesat announced that PT iForte Solusi Infotek (iForte), a leading Indonesian telecommunications service provider, signed significant contracts for Ku-band high throughput spot beam and C-band capacity on Telesat’s new Telstar 18 VANTAGE satellite in support of the Indonesian government’s rural broadband program.
