OTTAWA – A 2% uptick in revenues helped to buoy second quarter profits at Telesat.
For the quarter ended June 30, 2016, Telesat reported net income of $61.7 million compared to $56.1 year-over-year. The global satellite operator said that $6 million difference was principally the result of higher revenue and lower operating expenses for Q2 2016 as compared to Q2 2015, combined with favorable changes in the fair value of financial instruments and a lower tax expense, which were offset by unfavorable changes in the gain on foreign exchange and higher depreciation expense.
Revenues of $232 million grew approximately 2% ($5 million) compared to the same period last year. During the quarter, the U.S. dollar was approximately 4% stronger than it was during the second 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 was largely unchanged (an increase of $1 million) compared to the same period in 2015.
Operating expenses of $42 million for the quarter were 5% ($2 million) lower than the same period in 2015, and 7% ($3 million) lower when taking into account changes in foreign exchange rates.
Adjusted EBITDA for the quarter was $191 million, an increase of 3% ($6 million) year-over-year and an increase of 2% ($3 million) when adjusted for foreign exchange rate changes. The adjusted EBITDA margin improved to 82.5% in the second quarter of 2016 from 81.4% during the same period in 2015.
At June 30, 2016, Telesat said it had contracted backlog for future services of approximately $4.5 billion, and fleet utilization was 94% for its North American fleet and 66% for its international fleet.
“Although headwinds persist in certain markets we serve, our solid performance for the quarter and year to date highlights the broad strength and stability of our overall business, which is underpinned by our industry leading contractual backlog to revenue ratio”, said president and CEO Dan Goldberg, in a statement. “Looking ahead, we remain 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.”
