However, Telesat Holdings Inc. (Telesat) today announced its financial results for the three and six month periods ended June 30, 2011. All amounts are in Canadian dollars, and are reported under International Financial Reporting Standards (“IFRS”) unless otherwise noted.
For the three month period ended June 30, 2011, Telesat reported consolidated revenues of $200 million, a decrease of approximately 2% ($5 million) compared to the same period in 2010. When adjusted for foreign exchange rate changes over the period, revenues remained almost unchanged compared to the same period in 2010. Adjusted EBITDA1 for the second quarter of 2011 was $155 million, a decrease of 1% ($1 million) compared to the second quarter of 2010 and an increase of 1% ($1.7 million) when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin1 for the second quarter was 77.5% compared to 76% in the 2010 period.
Telesat reported net income of $22 million in the second quarter compared to net loss of $63 million for the same period in 2010. The higher net income is mainly due to lower operating expenses of approximately $4 million, lower interest expense of approximately $10 million, and higher gain on foreign exchange of approximately $161 million offset by an increase in tax expense of approximately $6 million and an unfavorable change in the fair value of financial instruments of approximately $82 million.
For the six month period ended June 30, 2011, consolidated revenues were $403 million, a decrease of approximately 0.3% ($1.4 million) compared to the same period in 2010. When adjusted for foreign exchange rate changes, revenues increased by 2% ($8 million) compared to the same period of 2010. Adjusted EBITDA was $312 million, an increase of 3% ($9 million) over the same period of 2010 and an increase of 5% ($15 million) when adjusted for foreign exchange rate changes. The Adjusted EBITDA margin was 77% and net income was $137 million for the first six months of 2011, compared to 75% and $17 million, respectively, in the prior period.
“The second quarter was another solid one for Telesat, and I’m pleased with our growth in Adjusted EBITDA in the first half of the year and the continued expansion in our Adjusted EBITDA margin.” commented Dan Goldberg, Telesat’s President and CEO. “We successfully launched Telstar 14R in the quarter and, notwithstanding an anomaly in the deployment of one of its solar arrays, we currently expect the satellite will give us expansion capacity in the key Latin America and maritime markets to support our planned growth. At this time, we remained focused on the launch in a few months’ time of the ViaSat-1 satellite, as Telesat owns the satellite’s Canadian payload, and achieving our full year financial and operational objectives.”
Business Highlights
At June 30, 2011:
—Telesat had contracted backlog for future services of approximately $5.4 billion.
— Fleet utilization was 89% for Telesat’s North American fleet and 79% for Telesat’s international fleet.
— On April 11, 2011, Telesat acquired from Loral Space & Communications Inc. (‘‘Loral’’) all of Loral’s rights and obligations with respect to the Canadian payload on the ViaSat-1 satellite, and all related agreements. In connection with this acquisition, Telesat assumed from Loral a contract with Telesat’s longstanding customer Xplornet (formerly known as Barrett Xplore), which has committed to use ViaSat-1’s Canadian payload for 15 years to bring advanced, high capacity broadband services to rural Canadians. Telesat expects the ViaSat-1 satellite to be launched in approximately two months.
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