From: Telesat Canada
Posted: Tuesday, July 25, 2017
Telesat Canada (“Telesat”) today announced its financial results for the three and six-month periods ended June 30, 2017. All amounts are in Canadian dollars and are reported under International Financial Reporting Standards (“IFRS”) unless otherwise noted.
For the quarter ended June 30, 2017, Telesat reported consolidated revenues of $226 million, or a decline of 3% ($6 million) from the same period in 2016. The decline in revenue was primarily due to short-term services provided to another satellite operator in the second quarter of 2016, partially offset by favorable foreign exchange rate changes on the conversion of U.S. dollar revenue, as the U.S. dollar was approximately 5% stronger on average against the Canadian dollar than it was during the second quarter of 2016. Excluding the impact of foreign exchange rate changes, revenue decreased by 5% ($12 million) compared to the same period in 2016.
Operating expenses of $44 million for the quarter were 5% ($2 million) higher than the same period in 2016, or 2% ($1 million) higher excluding the impact of changes in foreign exchange rates. Adjusted EBITDA 1 for the quarter was $184 million, a decrease of 4% ($7 million) compared to the same period in 2016 and a decrease of 7% ($13 million) when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin 1 for the second quarter of 2017 was 81.3%, as compared to 82.5% in the same period in 2016.
For the six-month period ended June 30, 2017, revenue was $461 million, a decrease of 1% ($6 million) compared to the same period in 2016. When adjusted for changes in foreign exchange rates, revenues declined 2% ($9 million) compared to the same period in 2016. Operating expenses were $99 million, an increase of 11% ($10 million) from the first half of 2016. The increase in operating expenses was due to compensation expense associated with certain payments to option holders made in connection with the cash distribution to shareholders in the first quarter of 2017. Adjusted EBITDA 1 was $376 million, a decrease of 2% ($6 million). When adjusted for foreign exchange rate changes Adjusted EBITDA (1) declined by 2.5% ($10 million) compared to 2016. The Adjusted EBITDA margin(1) for the first half of 2017 was 81.6%, compared to 81.9% in the same period in 2016.
Telesat’s net income for the quarter was $148 million compared to net income of $62 million for the quarter ended June 30, 2016. The $86 million difference was the result of a higher non-cash gain on foreign exchange arising principally from the translation of Telesat’s U.S. dollar denominated debt into Canadian dollars and favorable changes in the fair value of financial instruments in the second quarter of 2017.
For the six-month period ended June 30, 2017, net income was $236 million, compared to net income of $299 million for the same period in 2016. The decrease in net income for the first half of the year was principally the result of lower gains on foreign exchange in the first half of 2017, arising from the translation of Telesat’s U.S. dollar denominated debt into Canadian dollars, partially offset by favorable changes in the fair value of financial instruments.
“Lower revenue and Adjusted EBITDA 1 in the second quarter compared to the same period last year is a function principally of certain short-term satellite services we provided to another satellite operator in the prior period that did not recur in the second quarter of this year,” commented Dan Goldberg, Telesat’s President and CEO. “Absent that item our results would have been more stable. Looking ahead, we are focused on increasing the utilization of our available in-orbit capacity, maintaining our operating discipline and executing on our key growth initiatives.”
At June 30, 2017:
Telesat’s report on Form 6-K for the quarter ended June 30, 2017, has been filed with the United States Securities and Exchange Commission (“SEC”) and may be accessed on the SEC’s website at www.sec.gov.
Telesat has scheduled a conference call on Wednesday July 26, 2017, at 09:00 a.m. ET to discuss its financial results for the three and six month periods ended June 30, 2017. The call will be hosted by Daniel S. Goldberg, President and Chief Executive Officer, and Michel Cayouette, Chief Financial Officer, of Telesat.
Prior to the commencement of the call, Telesat will post a news release containing its financial results on its website (www.telesat.com) under the tab “News & Events” and the heading “News”.
The toll-free dial-in number for the teleconference is +1 (800) 377-0758. Callers outside of North America should dial +1 (416) 340-2218. The conference reference number is 4264739. Please allow at least 15 minutes prior to the scheduled start time to connect to the teleconference.
Dial-in Audio Replay:A replay of the teleconference will be available one hour after the end of the call on July 26, 2017, until 11:59 p.m. ET on August 9, 2017. To access the replay, please call +1 (800) 408-3053. Callers outside of North America should dial +1 (905) 694-9451. The access code is 8681512 followed by the number sign (#).
All Adjusted EBITDA, Adjusted EBITDA margins and backlog measures included in this release are non-IFRS financial measures, as described in the End Notes section of this release. For information reconciling Adjusted EBITDA and the Adjusted EBITDA margins to the most comparable IFRS financial measures, please see the consolidated financial information below.
Forward-Looking Statements Safe Harbor
This news release contains statements that are not based on historical fact and are ‘‘forward-looking statements’’ within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this news release, the words “looking ahead”, “executing”, and “maintaining”, or other variations of these words or other similar expressions are intended to identify forward-looking statements and information. Actual results may differ materially from the expectations expressed or implied in the forward-looking statements as a result of known and unknown risks and uncertainties. Detailed information about some of the known risks and uncertainties is included in the “Risk Factors” section of Telesat Canada’s Annual Report on Form 20-F for the fiscal year ended December 31, 2016 which can be obtained on the SEC website at http://www.sec.gov. Known risks and uncertainties include but are not limited to: risks associated with operating satellites and providing satellite services, including satellite construction or launch delays, launch failures, in-orbit failures or impaired satellite performance, volatility in exchange rates and risks associated with domestic and foreign government regulation. The foregoing list of important factors is not exhaustive. The information contained in this news release reflects Telesat’s beliefs, assumptions, intentions, plans and expectations as of the date of this news release. Except as required by law, Telesat disclaims any obligation or undertaking to update or revise the information herein.
About Telesat (www.telesat.com)
Telesat is a leading global satellite operator, providing reliable and securesatellite-delivered communications solutions worldwide to broadcast, telecom, corporate and government customers. Headquartered in Ottawa, Canada, with offices and facilities around the world, the company’s state-of-the-art fleet consists of 15 satellites, the Canadian payload on ViaSat-1, and two new satellites under construction. An additional two prototype satellites are under construction for launch into low earth orbit (LEO) as part of Telesat’s plans to deploy an advanced, global LEO satellite constellation offering low latency, high throughput broadband services. Telesat also manages the operations of additional satellites for third parties. Privately held, Telesat’s principal shareholders are Canada’s Public Sector Pension Investment Board and Loral Space & Communications Inc. (NASDAQ: LORL).
For further information:
Michael Bolitho, Telesat, +1 (613) 748-8700 ext. 2336; firstname.lastname@example.org
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