A day after Telesat announced a major deal with the Government of Canada, the telecommunications company released its second quarter earning results with consolidated revenue of $188 million.
Am increase in Telesat Lightspeed hires
On August 13 Telesat reported that Q2 revenue was “a decrease of 10% ($20 million) compared to the same period in 2020. When adjusted for changes in foreign exchange rates, revenue declined 3% ($7 million) compared to 2020.”
In a conference call, Telesat CEO Dan Goldberg said EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was down 3%, with an adjusted EBITDA of 79.2%, “essentially flat compared to the prior period.”
Goldberg said the reduction revenue and adjusted EBITDA was “was principally the result of a slight reduction of service for one Telesat’s North American DTH customers, non-renewals from certain enterprise customers, including maritime and aero customers for the first half year comparisons, and lower consulting revenue.”
Operating expenses also increased to $57 million for the quarter, and increase of $11 million. The company stated that “the increase in operating expenses was principally the result of a $16 million increase in non-cash share-based compensation combined with higher wages due to the hiring of additional employees primarily to support our Telesat Lightspeed program. These increases were partially offset by higher capitalized engineering and lower bad debt expense in the three months ended June 30, 2021.”
“For the quarter ended June 30, 2021, net income was $61 million, compared to net income of $162 million for 2020. The negative variation for the quarter was principally the result of lower non-cash foreign exchange gains in 2021, arising from the translation of Telesat’s U.S. dollar denominated debt into Canadian dollars and an increase in unusual/non-recurring items relating to share based compensation.”
“For the six-month period ended June 30, 2021, Telesat reported consolidated revenue of $378 million, a decrease of 9% ($38 million) or, when adjusted for foreign exchange rates, a decrease of 5% ($19 million) compared to the same period in 2020.”
An update on going public
During the conference call with analysts, Goldberg stated the company was on track to go public in its new structure later this quarter or early in the fourth quarter. Goldberg also stated that “last week, we obtained the FCC (Federal Communications Commission) approval we needed, and Loral disclosed last Friday that it’s already received sufficient proxy votes from its shareholders in support of the transaction, recognizing that those votes are still revocable. For our shareholder meeting where the final vote will occur is scheduled to take place later this month, on August 23.”