Telesat turns Q1 profit despite 9% revenue dip as pandemic plays havoc with key customers

Dan Goldberg
Dan Goldberg is president and CEO of Ottawa-based Telesat. File photo

Satellite equipment provider Telesat said Friday its revenues fell nine per cent year-over-year in the first quarter as key customers in the commercial airline and cruise ship industries continued to be hit hard by the pandemic.

The Ottawa-based company reported revenues of $190 million for the three-month period ending March 31, down from $208.7 million a year earlier. With foreign exchange rate fluctuations factored in, revenues declined by six per cent, or $13 million.

Still, Telesat managed to turn a net profit of $42 million in the quarter after posting a loss of $278 million in the same period in 2020. The company attributed the turnaround mainly to non-cash gains on foreign exchange after translating its U.S.-dollar-denominated debt into Canadian currency.

Telesat president and CEO Dan Goldberg touted the firm’s $2.5-billion order backlog, saying the company continued to generate “strong cash flows.” 

LEO satellite project

He also said Telesat made “significant progress” on its multibillion-dollar Lightspeed low-Earth-orbit satellite constellation in the first quarter, signing major deals with key suppliers Thales Alenia Space and MDA while announcing plans to raise US$500 million in a recent secured note offering

Goldberg said the firm expects to finalize financing for the project in the coming months. The satellite network’s operations hub will be headquartered in Gatineau at a facility that’s expected to employ nearly 300 people. 

“Telesat Lightspeed will give Telesat and our customers a decisive competitive advantage in serving the enterprise broadband connectivity market, helping to bridge the digital divide around the world and fueling our growth for years to come,” he said in a statement.

Telesat has said it plans to go public on the Nasdaq later this year and hopes to bring in up to US$344 million through auctioning off its portion of the “C-band” radio spectrum in the U.S. to wireless carriers that will repurpose it for 5G networks.