OTTAWA — Telesat Canada released its second quarter 2018 financial results on Thursday, reporting a decline in revenue and a $6-million net loss when compared to the same quarter of 2017.
For the second quarter of 2018, Telesat reported consolidated revenues of $212 million, compared to $226 million in the same period in 2017.
Telesat said in a news release the company’s poor financial numbers were primarily due to a weaker US dollar during the three-month period ending June 30. During the quarter, the US dollar was approximately 4% weaker against the Canadian dollar than it was during the second quarter of 2017 and, as a result, there was an unfavourable impact on the conversion rate of Telesat’s US dollar-denominated revenues, the company said in the news release.
When the impact of the foreign exchange rate changes is excluded, Telesat’s revenue in Q2 2018 decreased by 4%, or $8 million, compared to the second quarter of 2017, the company said.
On a positive note, Telesat’s operating expenses of $36 million for the second quarter were 18% ($8 million) lower than the same period in 2017, or 16% ($7 million) lower excluding the impact of changes in foreign exchange rates.
However, the company’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in Q2 2018 was $179 million, a decrease of 3% or $5 million compared to the second quarter of 2017.
Telesat’s net loss of $6 million for the second quarter of 2018 was a significant negative result, when compared to the net income of $148 million it reported in the second quarter of 2017. The company said in its news release that the $154-million difference was the result of a higher non-cash loss on foreign exchange arising principally from the translation of Telesat’s US dollar-denominated debt into Canadian dollars in the second quarter of 2018.
Telesat also released its financial results for the six-month period ended June 30. In the first half of the year, Telesat’s consolidated revenues were $444 million, a decrease of 4% or $16 million compared to the first half of 2017. When adjusted for changes in foreign exchange rates, the company’s revenues declined 1% ($4 million) compared to the same six-month period in 2017. Operating expenses were $74 million, a decrease of 25% or $25 million from the first half of 2017. Adjusted EBITDA in the first half of 2018 was $373 million, a decrease of 1% ($2 million). When adjusted for foreign exchange rate changes, adjusted EBITDA increased by 2% or $8 million compared to the first half of 2017. Finally, for the six-month period ended June 30, Telesat’s net loss was $21 million, compared to net income of $236 million for the same period in 2017.
“I am pleased with our performance for the second quarter and first half of the year,” said Dan Goldberg, Telesat’s president and CEO, in the company’s news release. “In addition to achieving solid financial results, we took a number of concrete steps to strengthen our business and position the company for future growth. In this regard, we completed the construction of our state-of-the-art Telstar 19 Vantage satellite and, last month, successfully launched it on a SpaceX Falcon 9 rocket. We also continued to make progress on our planned Telstar 18 VANTAGE satellite, which we anticipate will launch later this month.
“Moreover, our first Low Earth Orbit (LEO) satellite became operational in the quarter. It will be used to demonstrate some of the key advantages of our planned LEO constellation. The Telesat LEO constellation will deliver transformative, low latency, fibre-like broadband to commercial and government users worldwide. Earlier this week we announced that Telesat entered into two important contracts — one with a consortium comprised of Thales Alenia Space and Maxar and the other with Airbus — to further develop and validate the system design for our LEO constellation. Also in the quarter, we repriced our outstanding Term Loan, reducing our borrowing costs and strengthening our financial position. Looking ahead, we remain focused on increasing the utilization of our in-orbit satellites and executing on our key growth initiatives,” Goldberg said.
To access Telesat Canada’s full financial results for the quarter ended June 30, click here.
