Maxar Net Loss Per Share Lower Than Anticipated but MDA Unit Faces 2019 “Headwinds”

Maxar Q3 2019 results. Credit: Maxar Technologies.

While Maxar announced better than expected results on Monday, its Canadian MDA unit has seen its year over year revenue down by 25%.

MDA headwinds

That revenue was down was not unexpected.

Maxar CEO Dan Jablonsky said in the investor conference call “our third priority this year is positioning MDA for long-term growth following the recently completed RADARSAT Constellation Mission, which is creating revenue and adjusted EBITDA headwinds in 2019.”

In particular, it was the end of the RADARSAT Constellation Mission which attributed to the declining revenue.

Jablonsky then addressed MDA’s near term future in which he sees a return to growth.

Specifically Jablonsky said “as we move into future periods, we expect year-over-year comparables to become easier and for the business to return to grow. On the pipeline front, the Canadian Surface Combatant production phase in the early part of the 2020 is in front of us. So two is the Canadarm3 program where we feel we are uniquely positioned given our track record with the Canadarms on NASA space shuttle and on the international space station. And finally, MDA continues to be active in the GEO and LEO markets through our components and ground stations capabilities.”

When discussing MDA’s pipeline he citied these project areas;

  • Canadian Surface Combatant production phases
  • Canadarm3
  • GEO, LEO and space robotics programs

He also highlighted the following recent “wins”;

  • Sole-source award to build robotic interfaces for Canadarm3
  • Design contract with CSA for wildfire monitoring satellite
  • Airbus award for advanced navigation antennas

With respect to MDA’s LEO pipeline, the company still hopes to gain an important win when Telesat makes its decision on which bid will build its LEO Satellite constellation. Maxar, with MDA, is bidding against Airbus and Thales Alenia Space. Until recently, Maxar was working in partnership with Thales Alenia Space on their bid. They dissolved that partnership to compete on their own.

Maxar wins and debt financing update

Jablonsky announced during the call that Maxar had “recently awarded a GEO Comsat utilizing our 1,300 class architecture with an undisclosed customer.” Details of the deal will be released once all the contract details are completed. It’s an important win for the company, its second on the year in the difficult GEO Comsat segment.

On Monday the company announced it was issuing a US$1.250 billion senior secured notes offering. The company continues to face pressure in repaying its long-term debt. The move is seen as providing the company some breathing room as its capital expenditures remain high for now as the company builds its constellation of WorldView Legion constellation of six Earth Observation satellites.

The markets appeared to have liked Maxar’s update with the stock opening at $15.09 today on the TSX, up from last Friday’s close of $11.76. TD Securities changed its rating today from a hold to a speculative buy, and upped its target price from $9.50 to $15.00.

Investor presentation

About Marc Boucher

Boucher is an entrepreneur, writer, editor & publisher. He is the founder of SpaceQ Media Inc. and CEO and co-founder of SpaceRef Interactive LLC. Boucher has 20+ years working in various roles in the space industry and a total of 30 years as a technology entrepreneur including creating Maple Square, Canada's first internet directory and search engine.

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