Poor foreign exchange swing pushes Ottawa’s Telesat to full-year loss

Satellite
Stock image, for illustrative purposes only.

Though Telesat achieved several milestone satellite launches in its fiscal 2018 year, a bad swing on foreign exchange sunk the local firm’s bottom line.

Last week, the Ottawa-based satellite maker reported revenues of $232 million for the three-month period ending Dec. 31, a decrease of eight per cent year-over-year. The company attributed the comparatively lower fourth-quarter sales to a few short-term service contracts in the year before that didn’t recur in 2018.

The decrease would’ve been even steeper if not for new accounting standards that Telesat adopted at the start of last year, which ultimately boosted its revenues in the past quarter by $7 million.

For the full fiscal year, Telesat brought in revenues of $903 million, a decrease of three per cent.

The firm posted a net loss of $91 million for 2018, a major drop from its $505 million profit the year before. Telesat said in a statement that the swing was primarily due to foreign exchange losses in translating its U.S. dollar-denominated debt into Canadian currency, where it had made gains the previous year.

Telesat’s president and CEO Dan Goldberg said he was pleased with the company’s performance this past year and highlighted the launch of three new satellites, including the first of the firm’s low-earth orbit class.

Telesat’s LEO satellite constellation is designed to provide high-speed broadband connections “anywhere on earth.” It aims to accelerate the expansion of 5G networking around the world and drastically improve connectivity in rural and remote communities.

The firm has qualified two bidders, Airbus Defence and Space as well as a consortium made up of Thales Alenia Space and Maxar Technologies, to submit proposals for the construction and implementation of the LEO satellite constellation.

As of the end of 2018, Telesat had a contract backlog of $3.7 billion.