The local satellite communications company’s net income for the year dropped to $27 million, down from $237 million during the same period in 2011.
The decline was due in large part to $135 million in insurance claimed in 2011 for the failure of a solar array. In addition, Telesat lost $77 million in financing in 2012 as a result of the redemption of some senior notes and the write-off of deferred financing costs.
A large increase in its operating expenses due to an increase in the cost of equipment sales, among other factors, also contributed to the slide.
The company brought in revenues of $228 million in its fourth quarter of 2012 – an increase of 11 per cent, or $23 million compared to the same period in 2011. Those strong revenues led to a net income of $56 million in the quarter ended Dec. 31.
Last year, Telesat brought in revenues of $846 million, up five per cent from the previous year. That revenue growth was driven in part by the successful launch of its Nimiq 6 satellite in the second quarter of 2012, and a full year of revenue from the ViaSat-1 satellite that entered commercial service in December 2011.
“I am very pleased with our strong performance in 2012,” stated president and CEO Dan Goldberg in the financial results release. “In light of our strong growth in the second half of last year … and our industry-leading contractual backlog, we are well positioned for 2013 and beyond.”
Business highlights for the year included fleet utilization of 91 per cent for Telesat’s North American fleet and 83 per cent internationally.
The year also included the completed construction of the Anik G1 satellite, which is expected to be launched in the first half of 2013, and has been contracted for 15 years to Shaw Direct.
Telesat’s drop in annual net income was no surprise after its second quarter posting of a $243 million loss related to the refinancing of its senior notes.
An initial public offering may be on the horizon for the company, but no updates have been provided since OBJ first reported on the possibility in September.