Telesat Reports Slight Revenue Increase in 1st Quarter 2016
Ottawa, Canada April 28, 2016-Telesat Holdings Inc. today announced its financial results for the three month period ended March 31, 2016. Telesat reported consolidated revenues of CDN$ 235 million, an increase of approximately 3% (CDN $6 million) compared to the same period in 2015.
Operating expenses of CDN$ 47 million for the quarter were 4% ($2 million) higher than the same period in 2015, but largely unchanged when taking into account changes in foreign exchange rates. Adjusted EBITDA for the quarter was CDN 191 million, an increase of 3% (CDN $5 million) compared to the same period in 2015 and a decrease of 2% (CDN $3 million) when adjusted for foreign exchange rate changes.
The Adjusted EBITDA margin1 of 81% for the first quarter of 2016 was unchanged from the same period in 2015. Telesat‟s net income for the quarter was CDN $237 million compared to a net loss of $154 million for the quarter ended March 31, 2015. The CDN$ 391 million difference was principally the result of a mainly non-cash gain on foreign exchange arising from the translation of Telesat‟s U.S. dollar denominated debt into Canadian dollars partially offset by unfavorable changes in the fair value of financial instruments and by higher interest expense in the first quarter of 2016.
“Compared to the first quarter of 2015, our revenue and Adjusted EBITDA were down slightly, after adjusting for foreign exchange rate changes, as a result of continuing headwinds in certain markets we serve,” said Dan Goldberg, Telesat‟s President and CEO. “Notwithstanding this slight reduction, our Adjusted EBITDA margin was stable given our continued operating discipline and our contractual backlog remains robust. Looking ahead, we are focused on the sale of our available in-orbit capacity, the construction of Telstar 19 VANTAGE and Telstar 18 VANTAGE, and the further development of certain other important growth initiatives,” he added.
Highlights of the quarter include:
As of March 31, 2016, Telesat had contracted backlog for future services of approximately CDN$ 4.6 billion.
- Fleet utilization was 93% for Telesat‟s North American fleet and 65% for Telesat‟s international fleet. The change in utilization for Telesat‟s international fleet since December 31, 2015, reflects the availability of significant new incremental capacity on Telstar 12 VANTAGE.
- In February 2016, Panasonic Avionics Corporation signed a multi-year contract for high throughput satellite (HTS) Ku-band capacity covering the Mediterranean, Europe and Middle East on Telstar 12 VANTAGE.
- On April 27, 2016, Telesat announced the procurement of two prototype Kaband satellites for operation in low earth orbit (“LEO”) that are expected to launch in 2017 as the first phase of an advanced, global LEO constellation that Telesat is developing.
During the quarter, the U.S. dollar was approximately 12% stronger than it was during the first quarter of 2015 and, as a result, there was a favorable impact on the conversion of U.S. dollar denominated revenues. When adjusted for foreign exchange rate changes, revenue decreased by 1% ($3 million) compared to the same period in 2015. The decrease was primarily due to lower revenues from the energy and resource sector.
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