Telesat Selects Airbus for LEO Satellite Constellation and Reports Q2 Earnings

Telesat revenues in the second quarter this year were down 4% excluding the impact of foreign exchange rate changes, and the company’s backlog remained sizeable at $3.8B.

Along with the second quarter earnings report today, Telesat announced yesterday that it had signed on Airbus Defence and Space to develop a systems design for their LEO Satellite Constellation.

This is a similar contract to the one they announced on Monday with the consortium of Thales Alenia Space and Maxar Technologies.

CEO Dan Goldberg said in an investor conference call that Telesat is expecting to have two competing bids in from Airbus and the consortium within 9 months. Then within three months they will make a decision on whether to proceed with one of the bids, assuming they have their financing in place.

The Airbus contract includes subsidiary SSTL which built LEO-1, one of two demonstration satellites. The second demonstration satellite, LEO-2, was built by Maxar Technologies company SSL, but was lost on launch last December when a Russian rocket launch failed.

In a statement released with the Q2 earnings Goldberg said “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.”

Goldberg also said during the call that LEO-1, their LEO Constellation demonstration satellite went into service in April.

Here are some of the highlights from the Q2 earnings report;

• Telesat had contracted backlog for future services of approximately $3.8 billion.
• Fleet utilization was 94% for Telesat’s North American fleet and 68% for Telesat’s international fleet.
• In April 2018, Telesat entered into amended Senior Secured Credit Facilities, which reduced the applicable margin from 3.0% to 2.5% on the then outstanding borrowings of US $2,344 million.
• In May 2018, Telesat announced that orbit raising and payload testing on its Phase 1 LEO satellite was complete and that the spacecraft was ready to support live demonstrations of its capabilities.
• On July 22, 2018, Telesat announced the successful launch of its new Telstar 19 VANTAGE high throughput satellite (HTS). Telstar 19 VANTAGE is the latest in a new generation of Telesat satellites with capacity optimized to serve the types of bandwidth intensive applications increasingly in demand by users worldwide. Telstar 19 VANTAGE is expected to enter commercial service later this summer after it has successfully completed orbit raising and comprehensive in-orbit testing.
• Earlier this week, Telesat announced that it selected two contractor teams to further develop system designs for Telesat’s LEO constellation. One of the teams is a consortium of Thales Alenia Space and Maxar Technologies. The other team is led by Airbus Defence and Space (Airbus).