OTTAWA – The launch of Telesat’s Nimiq 6 satellite and a stronger Canadian dollar helped propel its revenues up by about 10% in the third quarter to $220 million, compared to the same period in 2011 for the three month period ended September 30, 2012.
For the nine month period ended September 30, 2012, consolidated revenues were $618 million, an increase of approximately 2% ($14 million) compared to the same period in 2011. Telesat also attributed revenue growth to the beginning of commercial service of the Canadian payload on the ViaSat-1 satellite in December of 2011.
Net income of $115 million in the third quarter compared to a net loss of $141 million for the same period in 2011. The company says the drastic turn around was principally the result of a gain on foreign exchange which was primarily due to the weakening of the U.S. dollar relative to the Canadian dollar during the quarter and its effect on the translation of Telesat’s U.S. dollar denominated debt into Canadian dollars. The favorable variations were partially offset by losses recognized on changes in the fair value of derivative instruments. The net loss was $29 million for the first nine months of 2012 compared to a net loss of $5 million for the same period in 2011.
“Compared to the third quarter last year, we experienced meaningful growth in revenue and adjusted EBITDA as well as continued expansion of our adjusted EBITDA margin,” said Dan Goldberg, Telesat’s President and CEO in a statement.
“In addition to the favorable financial performance, we completed construction of the Anik G1 satellite, which we expect to launch early next year and which has considerable expansion capacity that already is under long term contract with blue chip customers. In light of the expansion capacity that we have recently brought on line, the anticipated near term launch of Anik G1, and our industry-leading contractual backlog, we remain well positioned to achieve continued growth going forward.”
Adjusted EBITDA for the third quarter of 2012 was $175 million, an increase of 13% ($20 million) compared to the third quarter of 2011 and an increase of 12% ($19 million) when adjusted for foreign exchange rate changes. The adjusted EBITDA margin was 80% for the third quarter compared to 77% for the same period in 2011. For the nine month period ended September 30, 2012, adjusted EBITDA was $484 million, an increase of 4% ($17 million) over the same period of 2011 and an increase of 3% ($13 million) when adjusted for foreign exchange rate changes. The adjusted EBITDA margin for the first nine months of 2012 was 78% compared to 77% for the same period in 2011.
Business Highlights
- As of September 30, 2012:
– Telesat has contracted backlog for future services of approximately $5.2 billion.
– Fleet utilization was 91% for Telesat’s North American fleet and 82% for Telesat’s international fleet.
- Telesat completed the construction of the Anik G1 satellite, which is expected to be launched in early 2013. 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. In addition, Anik G1 will double Telesat’s existing capacity in South America from the 107.3 degree West orbital location.
- On March 28, 2012, Telesat declared a special cash distribution to its shareholders, as a reduction in stated value, in the amount of $656 million. Approximately $586 million of the distribution was paid in the first quarter while the remaining $70 million was paid in early July 2012.
- On July 25, 2012, Public Sector Pension Investment Board (‘‘PSP’’) delivered a notice to Telesat Holdings Inc. and Loral Space & Communications Inc. exercising its right to require Telesat Holdings Inc. to conduct an initial public offering. Telesat says there “can be no assurance as to whether, when or on what terms an initial public offering of Telesat Holdings Inc.’s equity may occur.”
- On October 24, 2012, Telesat, together with Telesat LLC, launched an offering for an additional U.S. $200 million of 6% senior notes due 2017. Telesat has used the net proceeds from the offering to fund the repayment of certain indebtedness owed to its principal shareholders, including accrued and unpaid interest thereon and for general corporate purposes.
