OTTAWA – The struggling Canadian dollar cut in to first quarter profits at Telesat, which fell more than $126 million from the same period in the prior year.
For the quarter ended March 31, 2015, the global satellite operator reported a net loss of $154 million compared to net loss of $28 million year-over-year. It said that results were negatively impacted by a non-cash loss on foreign exchange arising from the translation of Telesat’s U.S. dollar denominated debt into Canadian dollars as well as lower operating income. The losses were partially mitigated by a higher gain on changes in the fair value of financial instruments and by lower interest expense in the first quarter of 2015.
Consolidated revenues of $229 million dipped approximately 5% ($13 million) compared to the same period last year. During the quarter, the U.S. dollar was approximately 12% stronger than it was during the first quarter of 2014, 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 10% ($25 million) compared to the same period in 2014, primarily due to revenues from short-term services provided to other satellite operators in the first quarter of 2014 which did not recur in the first quarter of 2015.
Operating expenses of $45 million for the quarter were 4% ($2 million) lower than the same period in 2014 or 9% ($4 million) lower when taking into account changes in foreign exchange rates. This reduction was primarily due to lower cost of sales in 2015.
Adjusted EBITDA for the quarter was $186 million, a decrease of 6% ($12 million) over last year and a decrease of 11% ($22 million) when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin was 81% for the first quarter of 2015 compared to 82% for the same period in 2014.
At March 31, 2015, Telesat said it had contracted backlog for future services of approximately $4.6 billion, and fleet utilization was 93% for its North American fleet and 80% for its international fleet.
“Our first quarter revenue and EBITDA were lower than the same period last year principally as a result of the fact that certain short-term satellite services we provided to other satellite operators in 2014 did not recur in the first quarter of this year,” said president and CEO Dan Goldberg, in a statement. “Despite this reduction, our Adjusted EBITDA margin was essentially stable given our continued operating discipline.
“Looking ahead, the Telstar 12 VANTAGE satellite remains on schedule, and we anticipate its launch toward the end of this year. Our satellite expansion plans combined with our industry-leading contractual backlog provides visibility into the stability of our future revenue and cash flow and positions us well for future growth.”
