Canada's Telesat Q4 revenue falls 26% on DTH, enterprise weakness

Overview

• Canada satellite operator's Q4 revenue declined 26% yr/yr due to DTH and enterprise segment weakness

• Q4 adjusted EBITDA fell 46% yr/yr, reflecting lower revenue and debt refinancing-related costs

• Company posted narrower net loss of C$433 mln due to foreign exchange gains

Outlook

• Telesat expects 2026 GEO revenue between C$300 mln and C$320 mln

• Company sees 2026 GEO adj EBITDA at C$210 mln to C$230 mln, excluding non-recurring costs

• Telesat projects 2026 Lightspeed spending of C$1.0 bln to C$1.2 bln

Result Drivers

• DTH AND ENTERPRISE WEAKNESS - Co said Q4 revenue decline was mainly due to rate and capacity reductions by North American DTH customers and lower revenue from enterprise customers serving rural broadband

• COST CONTROL - Co said lower share-based compensation and increased capitalized labour in LEO segment more than offset higher legal and professional fees related to equity distribution and debt refinancing, bringing operating expenses down by 14%

Company press release: ID:nGNXRNKQr

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the wireless telecommunications services peer group is "buy"

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