Loral Reports Reduced Liquidity

Communications Today, Nov 8, 2001

Loral's liquidity, including cash and available bank credit, fell to $246 million at the end of 2001's third quarter, down $31 million from $277 million at the end of the second quarter, the company reported. Reasons include capital spending of $48 million, interest and preferred dividend payments of $62 million, and debt repayments of $26 million, they explained.

Loral's year-end liquidity is expected to slip yet further to slightly above $120 million, exceeding prior guidance, company officials said. Revenues also dipped in the latest third quarter to $261 million, compared to $293 million in the year-ago quarter primarily due to lower revenue from satellite manufacturing.

On the positive side, Loral's EBITDA (earnings before interest, taxes, depreciation and amortization) was $49 million in the third quarter and $170 million for the nine months, up 17 percent and 27 percent, respectively, from the same periods a year ago. The gains were driven by increased margins at Loral Skynet, offset by a $19 million decline in Space Systems/Loral's EBITDA contribution to $1.3 million, company officials said.

For the third quarter, Loral Skynet achieved EBITDA of $71 million, an increase of 42 percent from the same period last year, company officials said Loral Skynet's EBITDA margin improved to 71 percent from 63 percent for the same period last year.