Telesat Q121 Revenues Decline Due to Mobility Headwinds
The pandemic’s effect on the mobility market affected Telesat’s first quarter results as it moves forward with plans for its Lightspeed constellation.
On Friday, Telesat reported $190 million Canadian dollars ($157 million) in Q1 revenue, down 9% compared to the same quarter in 2020. The Canadian operator cited the pandemic’s impact on customers serving commercial airline and cruise industries, along with changes to foreign exchange rate for the decrease.
Net income, however, was up 115% over the same time last year. Q1 net income of CA$42 million ($34.7 million) was a boost from a net loss of CA$278 million ($229 million) in Q1 2020 because of non-cash gains on foreign exchange arising because Telesat translated its U.S. dollar denominated debt into Canadian dollars in the first quarter of 2021.
Telesat’s backlog for future services stands at approximately CA$2.5 billion ($2 billion). Broken down by application, Broadcast made up 52% of revenue, Enterprise Service 46%, and Consulting 2%.
“Our first quarter results reflect, in part, the adverse impact of the COVID-19 pandemic on revenue, which did not impact the prior period,” Telesat CEO and President Dan Goldberg said. “Nonetheless, we continued to generate strong cash flows and maintained high operating margins and a substantial contractual backlog, which provides high visibility into our future performance.”
Goldberg also highlighted the progress Telesat has made in announcing partners for its Lightspeed constellation. The operator has had a flurry of announcements in the past few months for its Low-Earth Orbit (LEO) constellation, selecting Thales Alenia Space as the manufacturer, MDA to manufacture the phased array antennas that will be incorporated into the Lightspeed satellites, and Cloud Ops as the cloud partner. In terms of financing, Telsat raised $500 million for Lightspeed by issuing a secure bond, and received a $316 million investment from the government of Québec.
“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,” Goldberg commented.
Telesat is also in the midst of a deal to go public with Loral Space & Communications, and expects the deal to close in the third quarter of this year.