Telesat Reports Increases in Net Earnings for 2Q 2006

OTTAWA, ON, Aug. 3, 2006/Satnews Daily/ — Telesat Canada said on Wednesday it posted net earnings applicable to common shares of $38.23 million (CAD 43.0 million), 63 percent higher than the $23.39 million (CAD 26.3 million) from the second quarter of 2005 largely due to lower enacted future tax rates and the elimination of the large corporations tax in 2006.

Due to the major one-time sale of an IDL network in the second quarter of 2005, however, Telesat’s second quarter operating revenue of $106.35 million (CAD 119.6 million) represented a 13 percent decrease from $122.10 million ($137.3 million) in the same period last year. Excluding the one-time sale in the second quarter of 2005, revenue would have shown an increase of 1 percent.

For the first six months of 2006, operating revenues totaled $211.21 million (CAD 237.5 million) (2005: $217.86 million (CAD 245.0 million)) and net earnings applicable to common shares were $57.44 million (CAD 64.6 million) (2005: $40.72 million (CAD 45.8 million)). Cash flows from operating activities were $109.64 million (CAD 123.3 million) for the first six months of 2006 compared to $85.72 million (CAD 96.4 million) for the same period in 2005, an increase of $23.92 million (CAD 26.9 million) or 28%. Telesat said the increase is due to a significant increase in accounts receivable in 2005 for the IDL network.

Telesat also revealed the temporary launch delay for Anik F3 due to a Proton launch vehicle failure which occurred in early 2006. The spacecraft has completed all of its testing at the manufacturer’s facility in Toulouse, France. A Proton launch has been tentatively rescheduled for early next year.

Telesat also reported that the Preliminary Design Review for Telesat’s Nimiq 4 Direct-to-Home satellite has been successfully completed with EADS Astrium. This spacecraft has an in-orbit delivery date in the first half of 2008.

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