Telesat(TSAT) - 2024 Q1 - Quarterly Report

Financial Performance - Telesat reported consolidated revenue of $704 million for the year ended December 31, 2023, a decrease of 7% ($55 million) compared to 2022[2] - Adjusted EBITDA for the full year 2023 was $534 million, a decrease of 6% ($34 million), with an Adjusted EBITDA margin of 75.8%[4] - Telesat's net income for 2023 was $583 million, a significant improvement from a net loss of $82 million in the prior year[5] - Revenue for Q4 2023 was $165,901,000, a decrease of 19.7% from $206,684,000 in Q4 2022[20] - Operating income for the year 2023 was $568,846,000, compared to $296,453,000 in 2022, reflecting an increase of 91.7%[20] - Net income for 2023 was $583,270,000, a significant recovery from a net loss of $81,597,000 in 2022[20] - Adjusted EBITDA for the twelve months ended December 31, 2023, was $533,702,000, with an Adjusted EBITDA margin of 75.8%[24] Cash and Debt Management - The company ended 2023 with a cash balance of $1.7 billion and a substantial contractual backlog of $1.3 billion[2] - Cash and cash equivalents at the end of 2023 were $1,669,089,000, slightly down from $1,677,792,000 at the end of 2022[22] - Long-term indebtedness reduced to $3,197,019,000 in 2023 from $3,850,081,000 in 2022, a decrease of 17%[21] - Interest expense for 2023 was $270,350,000, an increase from $221,756,000 in 2022[22] - The company reported a gain on repurchase of debt amounting to $230,080,000 for the year 2023[20] - The company expects to reduce its total cost of borrowings by approximately US$750 million compared to its prior Telesat Lightspeed plan[2] Future Projections - For 2024, Telesat expects revenues to decline to between $545 million and $565 million, reflecting a projected 34% decrease in Adjusted EBITDA[10] - Telesat anticipates total capital expenditures for Telesat Lightspeed to be between $1,000 million and $1,400 million in 2024[15] Operational Highlights - Operating expenses for 2023 were $205 million, a decrease of 21% ($54 million) from 2022[3] - Telesat has contracted MDA Space to build satellites for the Telesat Lightspeed program, which is fully funded through global service delivery[9] - The company entered into a launch agreement with SpaceX for 14 launches, marking the largest commercial satellite launch agreement in SpaceX's history[9] Backlog and Revenue Recognition - The contracted revenue backlog, referred to as backlog, represents Telesat's expected future revenue from existing service contracts, primarily from satellite capacity agreements[26] - The backlog calculation follows revenue recognition policies under IFRS 15, reflecting future revenue without discounting for present value[26] Other Financial Metrics - Total assets decreased to $6,274,355,000 in 2023 from $6,479,593,000 in 2022, a decline of 3.2%[21] - Non-controlling interest increased to $1,737,065,000 in 2023 from $1,358,716,000 in 2022, reflecting a growth of 27.8%[21] - Telesat emphasizes the importance of Adjusted EBITDA and Adjusted EBITDA margin for understanding operating results and comparing performance with competitors[26] - The figures from 2022 were restated due to the amendment from IAS 12, Income Taxes, impacting the financial statements[27]