[Satellite TODAY 05-12-10] Loral CEO Michael Targoff confirmed that the company intends to sell a portion of its stake in Space Systems/Loral (SS/L) while announcing Loral’s 2010 first quarter results, released May 11.
    “In order to further support the growth in SS/L’s business, we intend to pursue an initial public offering for the sale of up to 19.9 percent of SS/L. We are working with two leading investment banks in connection with the planned IPO and for the evaluation of other possible strategic alternatives,” Targoff said.
    SS/L reported revenues of $230.8 million, compared to $216.4 million in the first quarter of 2009. Adjusted EBITDA for the quarter was $12.7 million, compared to $10.4 million for the first quarter of 2009. SS/L’s backlog stood at $1.4 billion as of March 31. SS/L also said it was recently awarded a contract to build its second high-power, advanced satellite of the year after Satmex-8, for one of its long-standing customers. Details of that contract will be announced in the second quarter.
    SS/L’s performance caps a strong quarter for Loral and its satellite service and manufacturing interests, which includes the operator Telesat. Loral generated net income of $29.4 million during the quarter, recovering from the $10.8 million loss it suffered in the first quarter of 2009.
    Loral’s income statement reflects its 64 percent economic interest in Telesat. The company said its growth was driven by the effect of changes in the U.S/Canadian dollar exchange rate and partially offset by a $14.4 million charge for directors’ indemnification expenses. Loral ended the quarter with $142.2 million in available cash compared to $168.2 million at the end of 2009.
Loral’s revenues and adjusted EBITDA for the quarter after eliminations were $228.9 million and $8.5 million, compared to $212.5 million and $5.5 million, respectively, for the first quarter of 2009.
    Telesat’s first-quarter revenue jumped from $165.2 million in 2009 to $191.5 million in 2010, driven by income generated from the Telstar 11N and Nimiq 5 satellites, which entered service in 2009 and changes in the U.S./Canadian dollar exchange rate. Revenue growth together with lowered expenses drove adjusted EBITDA margin to 75 percent for the current quarter compared to 70 percent for the first quarter of 2009.
   Telesat’s backlog stood at $5.7 billion at the end of March, with $226 million cash-on-hand and short-term investments as well as approximately $151 million of borrowing availability under its revolving credit facility.