All amounts are in Canadian dollars and are reported under International Financial Reporting Standards (“IFRS”) unless otherwise noted. For the quarter ended March 31, 2012, consolidated revenue was $196 million, a decrease of approximately 3 percent ($7 million) compared to the same period in 2011. The decrease in revenue was principally the result of a previously disclosed contractual rate reduction on one of Telesat’s Direct-to-Home (DTH) satellites, partially offset by growth from Telesat’s international satellite fleet and the additional revenue received from the Canadian payload on ViaSat-1. Adjusted EBITDA1 was $153 million, a decrease of 3 percent ($4 million) over the same period in 2011. The Adjusted EBITDA margin1 for the first quarter was 78 percent compared to 77 percent for the same period in 2011.
Telesat’s net income for the quarter was $99 million compared to a net income of $115 million for the quarter ended March 31, 2011. The change in net income is due to slightly lower revenues, higher operating expenses and the incurrence of a non-cash loss relating to the write-off of deferred financing fees associated with Telesat’s previous credit facilities. This variation in operating expenses was partially offset by a net positive variation in non-cash items such as gains/losses on foreign exchange and changes in fair value of financial instruments. Excluding expenses related to amounts paid or payable in connection with the refinancing of Telesat’s credit facilities, the special cash distribution to shareholders and last year’s review of strategic alternatives, operating expenses would have declined by $2 million (5 percent) year over year.
“I am pleased with our financial and operating performance in the first quarter of 2012,” said Dan Goldberg, Telesat’s President and CEO. “Notwithstanding the significant contracted reduction in revenue from one of our Direct-to-Home satellites, revenue and Adjusted EBITDA declined only modestly. In addition, we improved our Adjusted EBITDA margin and maintained our industry-leading contractual backlog. We also refinanced our senior secured credit facilities in the quarter and, in the process, extended our maturities at favorable interest rates. In connection with the refinancing we made a significant cash payment to shareholders, allowing them to receive a portion of the substantial value we’ve created in Telesat over the past few years. Lastly, we made meaningful progress on the construction of Nimiq 6 and Anik G1, satellites we expect to launch later this year. In light of the significant investments we are making in our fleet and our substantial contractual backlog, we are well positioned to grow our business this year and beyond.”
