Satellite equipment provider Telesat said Friday it posted a third-quarter loss amid a dip in revenues as some customers scaled back services.
The Ottawa-based company generated revenues of $192 million for the three-month period ending Sept. 30, down from $202 million a year earlier. With foreign exchange rate fluctuations factored in, revenues declined by two per cent, or $4 million.
Telesat said the drop in revenue was due to a “slight reduction of service” from one of its North American direct-to-home satellite customers as well as other clients’ moves to cut back or not renew certain services.
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In a statement, CEO Dan Goldberg said the pandemic has caused some customers to “restrain certain business activities,” but he added that Telesat has “continued to generate strong cash flows” despite the lingering economic fallout from the global health crisis.
The firm reported a net loss of $42 million, compared with last year’s net profit of $107 million in the same period. The company blamed the reversal mainly on non-cash losses on foreign exchange after translating its U.S.-dollar-denominated debt into Canadian currency as well as increases in non-cash share-based compensation in 2021.
LEO satellite program
Telesat is currently in the midst of the most ambitious project in its history, a $6.5-billion plan to build almost 300 low-Earth-orbit satellites that are slated to begin service in 2024.
Goldberg said the company has made “significant progress” on funding the project over the past few months, citing a $1.44-billion investment from the federal government that was announced in August. The satellite network’s operations hub will be in Gatineau at a facility that’s expected to employ nearly 300 people.
Telesat plans to go public on the Nasdaq later this year in a bid to raise additional capital for the LEO satellite program. Goldberg said Friday he expects the IPO to take place before the end of the year.
The company also 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.