Telesat Holdings Inc. (“Telesat”) today announced its consolidated financial results for the three and six month periods ended June 30, 2016. All amounts are in Canadian dollars and are reported under International Financial Reporting Standards (“IFRS”) unless otherwise noted.
For the quarter ended June 30, 2016, Telesat reported revenues of $232 million, an increase of approximately 2% ($5 million) compared to the same period in 2015. 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) compared to the same period in 2015 and an increase of 2% ($3 million) when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin1 improved to 82.5% in the second quarter of 2016 from 81.4% during the same period in 2015.
For the six month period ended June 30, 2016, revenue was $467 million, an increase of 2% ($11 million) compared to the same period in 2015. During the first half of 2016, the U.S. dollar was 8% stronger than it was during the first half of 2015. When adjusted for changes in foreign exchange rates, revenues were essentially unchanged (a decrease of $2 million) compared to the same period in 2015. Operating expenses were $89 million, unchanged from the first half of 2015 or 2% ($2 million) lower when adjusted for foreign exchange rate changes. Adjusted EBITDA was $382 million, an increase of 3% ($11 million) compared to the same period in 2015 and unchanged when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin for the first half of 2016 was 81.9%, compared to 81.4% in the same period in 2015.
Telesat‟s net income for the quarter was $62 million compared to net income of $56 million for the quarter ended June 30, 2015. The $6 million difference was principally the result of higher revenue and lower operating expenses for the quarter ended June 30, 2016, as compared to the same period in 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. For the six month period ended June 30, 2016, net income was $299 million, compared to a net loss of $98 million for the same period in 2015. The increase in net income for the first half of the year was principally the result of a gain on foreign exchange in the first quarter of 2016 arising from the translation of Telesat‟s U.S. dollar denominated debt into Canadian dollars.
“I am very pleased with our second quarter results,” commented Dan Goldberg, Telesat‟s President and CEO. “Compared to the same period last year and adjusting for foreign exchange rate changes, revenue was stable, operating expenses were 7% lower, Adjusted EBITDA1 was 2% higher, and our Adjusted EBITDA margin was slightly higher at 82.5%. 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. 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.”
About Telesat (www.telesat.com)
Telesat is a leading global satellite operator, providing reliable and secure satellite-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 plus the Canadian payload on ViaSat-1 with two new satellites under construction. An additional two prototype satellites are under construction and will be deployed in low earth orbit. 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).
