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Loral Space & Communications Ltd. has a market cap of $1.53 billion; its shares were traded at around $73.01 with and P/S ratio of 1.4.
Highlight of Business Operations:Telesat’s operating results are subject to fluctuations as a result of exchange rate variations. Approximately 49% of Telesat’s revenues received in Canada for the three and six months ended June 30, 2012, a substantial portion of its expenses and a substantial portion of its indebtedness and capital expenditures were denominated in U.S. dollars. The most significant impact of variations in the exchange rate is on the U.S. dollar denominated debt financing. A five percent change in the value of the Canadian dollar against the U.S. dollar at June 30, 2012 would have increased or decreased Telesat’s net income for the six months ended June 30, 2012 by approximately $149 million.
Telesat’s operating income decreased by $11 million for the three months ended June 30, 2012 as compared to the three months ended June 30, 2011 primarily due to the revenue decrease described above and the special payments to executives and certain employees of Telesat in connection with the cash distribution to shareholders in 2012, partially offset by the impact of the change in the U.S. dollar/Canadian dollar exchange rate on Canadian dollar denominated expenses. Telesat’s operating income excluding foreign exchange impact would have decreased by approximately $10 million for the three months ended June 30, 2012 as compared with the three months ended June 30, 2011.
Despite an increase in revenue, SS/L operating income decreased $13 million for the three months ended June 30, 2012 compared with the three months ended June 30, 2011. The decrease was primarily due to a $5 million increase in new business acquisition expenses resulting from increased proposal activity and a $3 million decrease due to lower margins attributable to lower average size and profitability of satellites under construction during 2012 compared to 2011.
Telesat’s operating income decreased by $55 million for the six months ended June 30, 2012 as compared to the six months ended June 30, 2011 primarily due to the revenue decrease described above and the special payments to executives and certain employees of Telesat in connection with the cash distribution to shareholders in 2012, partially offset by the impact of the change in the U.S. dollar/Canadian dollar exchange rate on Canadian dollar denominated expenses. Telesat’s operating income excluding foreign exchange impact would have decreased by approximately $55 million for the six months ended June 30, 2012 as compared with the six months ended June 30, 2011.
Despite an increase in revenue, SS/L operating income decreased $43 million for the six months ended June 30, 2012 compared with the six months ended June 30, 2011. The decrease was primarily due to a $12 million loss provision recorded on a contract awarded in the first quarter of 2012, an $11 million decrease due to lower margins attributable to lower average size and profitability of satellites under construction during 2012 compared to 2011, an $8 million decrease related to a technical issue which resulted in the delay and rescheduling of a satellite launch and a $10 million increase in new business acquisition expenses resulting from increased proposal activity.
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