Telesat swings to Q3 profit

Ottawa’s Telesat Holdings Inc. posted solid preliminary third-quarter results this week, thanks in large part to favourable foreign exchange shifts.

The satellite communications companysaid it expects to record revenues of $224 million in the three-month period ending Sept. 30, 2016, down seven per cent from the same period in 2015, when it finalizes its results on Nov. 2.

The company benefited from a stronger dollar south of the border and saw an increase from US denominated revenues, but attributed the overall decrease in revenues to the end of short-term services provided to another satellite operator in 2015. Adjusting for foreign exchange rate changes, revenue is expected to decrease by eight per cent year-over-year.

Operating expenses are expected to drop as well, though, coming in at $40 million for the quarter, down from $44 million a year previous. Part of the drop is attributable to a loss in sales and a reduction in associated expenses. These decreases came alongside lower costs of third-party satellite capacity, as well as lower Canadian spectrum licence fees.

Net income is expected to show the most significant improvement, coming in at $15 million for the third quarter of 2016 compared to a net loss of $139 million for the same periodin 2015. This massive jump is largely the result of the reduction in loss on foreign exchange, offset slightly by higher depreciation expenses.

Adjusted EBITDA is expected to be $186 million for the quarter, a decrease of six per cent from the same period a year ago.

Telesat also boasted a strong backlog of contracts with revenues of approximately $4.4 billion yet to be realized.

The company will hold its investors’ conference call with comments from president and CEO Dan Goldberg and CFO Michel Cayouette on Nov. 2 when it announces finalized numbers.