Days before the historic announcement April 3 by the Canadian Space Agency concerning the astronaut who will fly around the Moon in 2024 or so, MDA announced its full-year results yesterday (March 23) for 2022 showing strong financials in part due to Canadarm3.
Canadarm3 is Canada’s main contribution to the Artemis program for the Gateway lunar space station planned for later in the decade, and MDA is the lead contractor for the project following their experience with predecessors Canadarm and Canadarm2. Canadarm3 also is the means by which Canada got a seat aboard Artemis 2 along with other future NASA missions.
MDA last received a Phase B contract worth nearly $269 million in March 2022 for Canadarm3. It also has made sales of the robotic arm technology to Houston-based Axiom Space in the past year for their own International Space Station or ISS activities (which will eventually include modules that are designed to be a free-flying group from the ISS after its expected retirement in 2030 or so.)
“We continue to ramp up work on Phase B of the Canadarm3 contract,” MDA CEO Mike Greenley told investors during a conference call today (March 23), saying the design work “is ramping up in line with our expectations and the team is making good progress.” A system design review milestone is expected in the first half of the year, he added.
The Canadarm3 contract was cited as one of the key reasons that MDA has a $1.4 billion backlog, which is a 59 percent year-over-year increase in 2021. Also contributing to the backlog was MDA’s selection as prime contractor on Globalstar’s LEO constellation and “other smaller awards across our three business areas,” Greenley said. (The three business areas include geointelligence, satellite systems and robotics and space operations.)
NASA has said that Artemis 2 as well as Artemis 3, the first landing mission to reach the Moon since 1972, are both fully funded and it is early in new fiscal year negotiations to seek money to support Artemis 4 and beyond (for which hardware is already being assembled.) Greenley pointed to Canadian space companies like his “eagerly awaiting an announcement” concerning the astronaut who will be on Artemis 2, but also pointed to the Artemis program as giving good opportunities for MDA going forward.
Nine new signatories in 2022 joined the NASA-led Artemis Accords seeking not only Moon exploration work together, but a commitment among the 23 nation partners to peaceful exploration in space, he noted. “All of this activity bodes well for MDA and our future opportunity funnel, which we would characterize as very healthy,” Greenley said.
The overall yearly results included yearly revenues of $641.2 million (up 34 percent year-over-year), EBITDA excluding non-recurring items of $141.1 million (up 26 percent), EBITDA margin of 22 percent and the aforementioned backlog of $1.4 billion (up 52 percent).
MDA added it is working on “strategic investments” including new satellite manufacturing capabilities, commercial products from Canadarm3 technology, and continuing to develop CHORUS (a next-generation satellite constellation following the long-running RADARSAT series, which is still active with RADARSAT 2 and RADARSAT Constellation.)
CHORUS will include a fourth-generation MDA-built C-band synthetic aperture radar (SAR) satellite along with an X-band satellite from ICEYE; the constellation team concluded the mission critical design review in 2022 and started unit level build activities.
This year, CHORUS activities will include flight unit development and deliveries, building the ground segment subsystems and elucidating constellation operations plans and processes. Down the road, Greenley highlighted CHORUS as potentially beneficial for the defence and intelligence community, along with commercial customers. “It’s definitely exciting to be able to drop into the satellite production facilities in Montreal and see CHORUS pieces coming together,” he added.
MDA officials emphasized they are continuing to work around supply chain issues to avoid business disruptions, but aside from issues with Telesat’s Lightspeed constellation they have been able to maneuver using “proactive measures,” as Greenley said.
“These include designing around known shortages, finding alternatives that are more readily available, ordering materials as early as possible and building up inventory for some components or new programs,” Greenley added.
Telesat is expected to provide an update on Lightspeed shortly during its own quarterly results release next week, on March 29. In brief, the constellation was delayed due to supply chain issues, descoped, and then saw costs rise due to inflation; financing negotiations were ongoing during the last major update in November 2022. MDA is expected to develop a direct radiating array antenna for the constellation but is standing by for more news from Telesat, Greenley said.
“We continue to ensure that our bids and contribution to that program – like any other program in the pipeline, we have a number of them – remain current and valid so that they [Telesat] can act upon them should they get their financing put in place,” Greenley said. He emphasized the scope has not decreased in any conversations with Telesat, but that MDA continues to treat the situation as a “pipeline opportunity, like many others.”
