Ottawa satellite firm Telesat swings to $172M profit in Q1

Satellite
Stock image, for illustrative purposes only.

Telesat’s revenues dipped slightly in the first quarter of fiscal 2019, a decline the Ottawa-based satellite communications company blamed on less demand for its short-term services to other operators, lower equipment sales and a drop in revenue from customers in the resource sector.

Telesat reported revenues of $222 million for the three-month period ending March 31, down four per cent from a year earlier. When adjusted for foreign exchange rate fluctuations, the company’s revenue fell six per cent.

The firm’s overall operating expenses also rose by about $1 million year-over-year to $39 million. But Telesat still managed to post a net income of $172 million in the first three months of this year, compared with a net loss of $15 million in the first quarter of 2018, thanks largely to gains it made after translating debt from U.S. currency into Canadian dollars.

In a news release, CEO Dan Goldberg touted a number of contract wins for the company, including a “significant renewal” of a deal for direct-to-home satellite services with cable provider Shaw Communications and a “meaningful contract” to provide its new Telstar 18 Vantage satellite to a customer in Indonesia.

Goldberg also noted Telesat has landed its first customer for its planned low-earth orbit satellite constellation.

The company has been working with a pair of potential suppliers ​– Airbus and a consortium comprised of Thales Alenia Space and Maxar ​– to develop the new product. Goldberg told analysts Telesat is seeing “very significant demand in the market” for the service, but he gave no timeline for when production is likely to begin.

Telesat said its order backlog stood at $3.7 billion as of the end of March.

Goldberg also took time out of Thursday’s conference call to praise the work of longtime chief financial officer Michel Cayouette, who announced he will be retiring within the next 12 months.

“We’re very grateful for his significant contribution to the company,” Goldberg said of Cayouette, who joined Telesat in 2008 after serving as CFO at various firms in the telecom sector.