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Telesat reports results for the quarter that ended 2016

November 2, 2016

 

Telesat Holdings Inc. today announced its consolidated financial results for the three and nine month periods ended September 30, 2016. All amounts are in Canadian dollars and are reported under International Financial Reporting Standards unless otherwise noted.

 

Telesat confirms that these consolidated financial results are unchanged from the preliminary three and nine month results released on October 26, 2016. 

 

Three Months Ended September 30, 2016

For the quarter ended September 30, 2016, Telesat reported revenues of $224 million, a decrease of approximately 7% ($18 million) compared to the same period in 2015.  During the quarter, the U.S. dollar was approximately 1% stronger than it was during the third 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 declined by 8% (a decrease of $19 million) compared to the same period in 2015.  The largest contributor to the reduction in revenue relative to the same period last year was short-term services provided to another satellite operator in the third quarter of 2015 that did not recur in the third quarter of 2016. 

 

Operating expenses of $40 million for the quarter were 10% ($4 million) lower than the same period in 2015, with no impact from changes in foreign exchange rates. The reduction in operating expenses was principally attributable to lower costs of third party satellite capacity, lower Canadian spectrum license fees and lower equipment sales.

 

Adjusted EBITDA for the quarter was $186 million, a decrease of 6% ($12 million) compared to the same period in 2015 and a decrease of 7% ($13 million) when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin improved to 83.0% in the third quarter of 2016 from 81.9% during the same period in 2015. 

 

Telesat’s net income for the quarter was $15 million compared to a net loss of $139 million for the quarter ended September 30, 2015. The $154 million difference was principally the result of a reduction in the mainly non-cash loss on foreign exchange partially offset by higher depreciation expense. 

 

Nine Months Ended September 30, 2016

For the nine month period ended September 30, 2016, revenue was $691 million, a decrease of 1% ($7 million) compared to the same period in 2015. During the first three quarters of 2016, the U.S. dollar was 6% stronger than it was during the first three quarters of 2015. When adjusted for changes in foreign exchange rates, revenues declined 3% ($22 million) compared to the same period in 2015.  The largest contributor to the reduction in revenue relative to the same period last year was lower revenue from the energy and resource sector. 

 

Operating expenses were $129 million, or 3% ($4 million) lower than the first nine months of 2015 or 5% ($7 million) lower when adjusted for foreign exchange rate changes. The reduction in operating expenses was principally attributable to lower costs of third party satellite capacity and lower Canadian spectrum license fees.

 

Adjusted EBITDA for the nine months ended September 30, 2016 was $568 million, virtually unchanged compared to the same period in 2015 and 2% ($13 million) lower when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin for the nine months ended September 30, 2016 was 82.3%, compared to 81.6% in the same period in 2015.

 

For the nine month period ended September 30, 2016, net income was $314 million, compared to a net loss of $237 million for the same period in 2015. The variation for the nine month period ended September 30, 2016 was principally the result of a mainly non-cash gain on foreign exchange in 2016 compared to a mainly non-cash loss on foreign exchange in 2015 arising from the translation of Telesat’s U.S. dollar denominated debt into Canadian dollars.

 

“I am pleased with our third quarter performance and our results for the first nine months of the year,” commented Dan Goldberg, Telesat’s President and CEO. “Although results for the quarter are down relative to last year, with the largest contributor being certain short-term satellite services we provided to another satellite operator in Q3 2015, year to date results are broadly stable compared to last year and we continued to improve our operating efficiency, with an 83% Adjusted EBITDA margin1 for the quarter. This solid performance highlights the strength and stability of our overall business, which is underpinned by our industry leading contractual backlog to revenue ratio. Looking ahead, we remain focused on the sale of our available in-orbit capacity as well as the construction of Telstar 19 VANTAGE and Telstar 18 VANTAGE, both of which we anticipate to launch in the first half of 2018.”

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