MDA Space Ltd MDALF

Primary Symbol: T.MDA

Industrials Aerospace & Defense

MDA Space Ltd, formerly MDA Ltd, is a global space company. The Company is a robotics, satellite systems and Geo intelligence provider. It provides communications satellites and earth and space observation. It is also involved in space exploration and infrastructure. Its software, AURORA, is a digital satellite product line providing critical new solutions to operators. AURORA technology enables constellations to extend communication networks to every corner of the globe with digital automation, and robotics. Its communications satellites include a complete range of modular digital products and components for space-based communication solutions coupled with advanced manufacturing capable of producing two satellites a day. It owns and operates RADARSAT-2 earth observation satellite. Its earth observation services include analytics solutions that give customers information and insights from environmental monitoring, disaster management, maritime domain awareness and security to mining.

TSX:MDA - Post by User

MDA Space Ltd

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Post by retiredcfon May 11, 2022 8:49am

153 Views

Post# 34673377

RBC

May 11, 2022

Outperform

TSX: MDA; CAD 8.24

Price Target CAD 15.00

All values in CAD unless otherwise noted.
Priced as of prior trading day's market close, EST (unless otherwise noted).

MDA Ltd.

1Q22 results ahead of expectations, backlog to $1.5B, 2022 guidance unchanged sentiment: positive

Our view: MDA reported 1Q22 revenues of $128M, up 4% over 1Q21. The revenue growth was led by Robotics and Space Operations, at $42M. Gross margins were strong (tax credit benefit) and adjusted EBITDA margins were 21.6% (excluding one-time items) but with higher R&D spending offsetting the ~$6M improvement in gross margins. The backlog increased to $1.5B, up from $685M in 4Q21, and the LTM book-to-bill is running at 2.7x. The company has maintained its 2022 revenue guidance of $750M-$800M. We beleive the quarter was strong and should support confidence in the full- year 2022 outlook.

First impression:

MDA reported a strong 1Q22, led by healthy bookings. Revenues increased to $128M, ahead of consensus and our estimates, and adjusted EBITDA margins of 21.6%. While the EBITDA was largely in line with estimates, the company demonstrated solid cost management. The highlight in the quarter was the backlog growth as the company booked the Globalstar LEO contract ($415M) and the Canadarm3 Phase B contract ($269M).

The company has also redeemed its $150M second lien notes, which should provide a savings on interest. The company is currently at just .6x leverage. FCF was a use of $22M in the quarter, with operating cash flow of $15M and capex of $37M. Management is hosting a conference call this morning at 8:30am ET.

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