Satmex Announces First Quarter Results

    MEXICO CITY, Mexico, June 1 /PRNewswire/ -- Satelites Mexicanos, S.A. de
 C.V. ("Satmex") announced its operating results for the first quarter of 2000,
 posting revenue of $32.3 million and EBITDA (earnings before interest, taxes,
 depreciation and amortization) of $21.6 million, compared with revenues of $28
 million and EBITDA of $21.3 million during the first quarter of 1999.
     "I am very pleased with Satmex's first quarter performance," noted Bernard
 L. Schwartz, Chairman and Chief Executive Officer of Loral Space &
 Communications.  "The company has come in solidly on plan and Satmex is in for
 a strong year."
     Lauro Gonzalez, CEO of Satmex, noted, "We hit the important milestones
 early in the quarter, for example when we signed the 10 transponder, long-term
 contract with HNS [Hughes Network Systems].  Our focus this year is to
 continue to fill up the remaining available satellite capacity and meet our
 financial targets."
 
     Revenue
     Satmex reported total revenue of $32.3 million during the first quarter of
 2000.  EBITDA for the quarter was $21.6 million.  Revenue and EBITDA for the
 first quarter of 1999 were $28 million and $21.3 million, respectively.
     Revenue in the first quarter of 2000 consisted of 94% permanent service
 and 6% occasional and other revenue, compared with 88% permanent service and
 12% occasional and other revenue in the first quarter of 1999.
     Contracts subject to immediate cancellation without penalty represented
 less than 7% of Satmex's revenue base during the first quarter of 2000,
 compared with 47% of Satmex's revenue for the first quarter of 1999.
     Transponder leasing rates for both C-band and Ku-band capacity were
 largely unchanged during the periods for both the Solidaridad 1 and
 Solidaridad 2 satellites.  Satmex 5 began commercial operations in January
 1999 and leased capacity at rates higher than that of Solidaridad 1 and 2,
 reflecting its continental footprint and higher power levels.
     Revenue improved substantially in the first quarter of 2000 as compared to
 the first quarter of 1999 as a result of the full operation and high
 utilization of Satmex 5.
 
     Operating Expenses and Profitability
     Operating expenses grew by 60% in the first quarter of 2000 compared to
 the first quarter of 1999, from $6.7 million to $10.7 million, largely due to
 the increased insurance expense related to Satmex 5 in late January 1999; the
 hiring of upper and middle management personnel -- a process begun during the
 second half of 1998 and completed during the second quarter of 1999, and;
 management and intellectual property fees associated with the higher revenue
 generated during the first quarter of 2000.
     As a result of this increase in operating expenses, EBITDA in the first
 quarter of 2000 was $21.6 million, compared with $21.3 million in the first
 quarter of 1999.
 
     Business Highlights
     During the first quarter of 2000, Satmex counts among its key achievements
 the following:
 
     *  Signed on Satmex 5 a long-term, multitransponder contract for Hughes
 Network Systems.  By January 2000, Satmex 5 capacity was fully committed.
     *  Other significant contracts signed included a long-term contract with
 TV Azteca for additional capacity, and one transponder for ATC Teleports.
     *  As a result, Satmex posted net bookings during the first quarter of
 2000 of $145 million, which increased the backlog to $498 million.
     *  International revenue represented approximately 50% of total revenue in
 the first quarter of 2000, as compared to less than 20% in the year-earlier
 period.
     *  Revenue from contracts longer than 5 years in term represented greater
 than 50% of total revenue during the first quarter of 2000, versus less than
 10% in the first quarter of 1999.
     *  At March 31, 2000, the weighted average life of Satmex's contracts was
 73 months.
 
     Liquidity and Capital Resources
     On January 10, 2000, Satmex solicited from its holders of Senior Secured
 Floating Rate Notes and its participants in its Revolving Credit Facility an
 amendment to the $435 million Amended and Restated Credit Agreement to permit
 the modification of certain covenants, in exchange for the payment of a fee
 and an increase in the applicable margin.  On February 16, 2000, this
 amendment was declared effective.
     As of March 31, 2000, Satmex was in compliance with all debt covenants and
 available credit facilities continued to be available.
 
                              Financial Highlights
                                (US $, Millions)
 
                                         Three months ended
                                    3/31/00                  3/31/99
 
     Revenues                         32.3                    28.0
     Operating Expenses             (10.7)                   (6.7)
     EBITDA                           21.6                    21.3
     Depreciation &
     Amortization                   (15.4)                  (14.2)
     Operating Profit                  6.3                     7.2
     Interest Expense, Net          (16.4)                  (15.8)
     Pretax Loss                    (10.1)                   (8.7)
 
     Bookings                        145.3                   121.5
     Backlog                         497.7                   228.1
 
     Cash                              8.7                     5.1
     Total Debt                      587.8                   608.8
 
     Satmex is a leading Mexican satellite operator in the Americas that leases
 C and Ku band capacity on the Solidaridad 1, Solidaridad 2 and Satmex 5
 geostationary satellites.  Through its business partners in the NAFTA region
 and Latin America, Satmex delivers over 170 DTH channels to thousands of
 households, as well as news and entertainment to approximately 500 million
 viewers throughout the continent.  Satmex provides high-speed connectivity to
 ISPs and digital broadcast services providers (DBS).  Everyday, millions of
 long distance telephone calls are transmitted by the Satmex fleet.  Distance
 learning, rural telephony and telemedicine, among others, are delivered
 through the Satmex satellites, contributing to the development of rural
 regions, the integration of Latin America and the rest of the continent, as
 well as more efficient communications in the world's largest cities.
 
     Satmex is a member of the Loral Global Alliance, offering its customers
 the advantages of a worldwide network of satellite capacity currently
 available on the Solidaridad and Satmex 5 satellites, the eight-satellite
 Telstar fleet and on future Europe*Star and Brazil satellites.  Through this
 Alliance, Satmex provides global satellite solutions, focusing on the needs
 and requirements of the Americas.  For more information, please visit the
 Satmex web site at http://www.satmex.com .
 
     Principia is a leading Mexican telecommunications company that is majority
 owned by the Autrey family and Mr. Lauro Gonzalez.  In 1997, Principia and
 Loral Space & Communications were selected to acquire 75 percent of Satmex in
 connection with the privatization of Mexico's fixed satellite services.  In
 association with Loral Space & Communications and Vodafone AirTouch
 Communications, Principia founded Globalstar de Mexico in 1996.
 
     Loral Space & Communications (NYSE:   LOR) is a high technology company that
 primarily concentrates on satellite manufacturing and satellite-based
 services, including broadcast transponder leasing and value added services,
 domestic and international corporate data networks, global wireless telephony,
 broadband data transmission and content services, Internet services and
 international direct-to-home satellite services.  For more information, visit
 Loral's web site at http://www.loral.com .
 
 

SOURCE  Satmex