OTTAWA – Despite an 11% uptick in revenue, Telesat ended its first quarter of 2014 with a loss.
The global satellite operator reported a net loss of $28 million for the quarter ended March 31, 2014, compared to a net loss of $97 million for the same quarter last year. Results were positively impacted by improved operating income and lower interest expense in 2014, partially offset by a non-cash loss on foreign exchange arising from the translation of Telesat’s U.S. dollar denominated debt into Canadian dollars and higher tax expense. The first quarter of 2013 also included a loss on changes in fair value of financial instruments and a loss on financing related to the irrevocable notice to redeem Telesat’s 12.5% Senior Subordinated Notes.
Consolidated revenue of $242 million increased $23 million year-over-year, principally the result of revenue earned on the Anik G1 satellite, which entered into commercial service in May 2013, and the provision of short-term satellite services to another satellite service provider. The growth was partially offset by lower broadcast services revenue earned on Telesat’s Nimiq 2 satellite and lower revenue from equipment sales.
Operating expenses of $47 million were 6% ($3 million) lower than the same period in 2013 or 9% ($5 million) lower when taking into account changes in foreign exchange rates. This reduction was primarily due to lower cost of equipment sales, partially offset by an increase in share-based compensation expense as a result of stock options granted during the second quarter of 2013.
Adjusted EBITDA was $198 million, an increase of 16% ($28 million) compared to the first quarter of 2013 and an increase of 13% ($22 million) when adjusted for foreign exchange rate changes. The adjusted EBITDA margin was 82% versus 78% for the same period in 2013.
At March 31, 2014, Telesat said it had contracted backlog for future services of approximately $4.9 billion, and fleet utilization was 90% for its North American fleet and 83% for its international fleet.
“Anik G1 made important contributions to our results and we continue to execute well across the various markets in which we operate”, said president and CEO Dan Goldberg, in a statement. “Our investments in additional satellite capacity combined with our industry-leading contractual backlog provide visibility into the stability of our future revenue and cash flow and position us well for the balance of 2014 and beyond.”
