David Olive - Toronto Star The sky’s no limit for MDA Space’s future
Brampton-based MDA Space is steadfastly emerging as a major player in a rapidly growing space industry
The Canadarm2 reaches out to capture the SpaceX Dragon cargo spacecraft and prepare it to be pulled into its port on the International Space Station in 2015.
The Canadian Press file photo
MDA Space is quietly emerging as a major player in a rapidly growing space industry.
Brampton-based MDA is best known for its Canadarm robotic arm, used on space missions.
MDA’s share price popped by 13 per cent last week on news that MDA has won a $1-billion contract to build the latest-generation Canadarm3 for the Canadian Space Agency (CSA).
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MDA was expected to land the contract, having earlier been awarded preliminary design work on Canadarm3.
But the announcement drew attention to MDA’s expanded product offerings to meet booming demand.
The global space economy is expected to grow by about 60 per cent in the next decade to more than $1.1 trillion, and to $2.1 trillion by 2040.
MDA forecasts an increase in its own revenues this year of roughly 25 per cent, to as much as $1.05 billion.
“The company’s been on a great run,” Mike Greenley, CEO of MDA, said in a recent interview with BNN. “We’re going to cross the $1-billion sales line for the first time.”
Besides the Canadarm, MDA builds satellites; space antennas; autonomous robotic systems; Earth surveillance and aerial mapping software and equipment and planetary vehicle systems.
Demand is coming from operators of satellite networks that fill the gaps in terrestrial cellphone coverage with low-Earth-orbit (LEO) satellites.
Those networks, among the largest of which is Elon Musk’s Starlink “constellation,” also provide telecommunications in unserved and underserved parts of the world.
Demand is also growing for technology that MDA provides to space cargo operators and to exploration missions to outer space, or “deep space,” the region beyond the moon to Mars and across the solar system.
And governments increasingly want space-based surveillance and search and rescue capabilities as part of their national security infrastructure.
The Canadarm3 is only the latest big contract win for MDA.
Last year, Telesat, a leading satellite operator, awarded MDA a $2.1-billion contract to build almost 200 LEO satellites.
And in 2022, MDA won a $415-million contract to build 17 satellites for Globalstar, a leading U.S. satellite communications firm.
MDA leverages its Canadarm and satellite technology for new applications that have helped diversify its product line.
It has also refined its production methods to build two satellites a day at its Montreal facility. The Canadarm3 will be built at MDA’s new Dreamr lab in Brampton.
As the space industry has grown, MDA’s financial performance has been stellar.
MDA’s revenues have more than doubled in the past four years, to almost $808 million in 2023.
And MDA’s bottom line has recovered from a 2020 loss of $36 million. Profits last year soared by almost 86 per cent to $48.8 million.
At a current price of $13.50, MDA’s stock has gained more than 60 per cent in the past year.
Investors might be put off by the space sector, after the flameout of many space startups that went public in the heady days for tech stocks during the pandemic.
But MDA is an entrenched player that traces its 55-year-old roots to the former Spar Aerospace and MacDonald, Dettwiler and Associates.
MDA technology has been used in more than 450 space missions.
MDA’s client roster has grown beyond the government agencies like the CSA and the U.S. National Aeronautics and Space Administration (NASA) that it still supplies to include private-sector enterprises such as Airbus, Boeing, Lockheed Martin, Thales, Mitsubishi and Jeff Bezos’ Blue Origin space tourism venture.
MDA went public in 2021 after a Canadian investor group bought it from its then-U.S. parent and returned it to Canadian ownership.
MDA keeps a lower profile than Musk and Bezos but will be in the spotlight when its Canadarm3 is deployed on the Gateway space station. Gateway will support the Artemis 2 flight to the moon scheduled for late 2025.
That mission will see Canadian astronaut Jeremy Hansen become the first non-American to fly to the moon.
Greenley is convinced of MDA’s growth potential in a space sector known for its erratic fortunes.
That choppiness in previous decades is due largely to periodic cutbacks in government space budgets. But governments have taken a renewed interest in space, and the industry has changed with the addition of big-spending commercial enterprises.
MDA has a $3.1-billion order backlog. Greenley believes MDA’s expanded capabilities since it went public now put it in line for a potential $20 billion in new business.
MDA expects to hire about 1,200 people this year. Recruiting high-skill workers on that scale is a challenge, but MDA has been able to fill the positions.
“There are people with a space passion who have always dreamed of building things for space,” says Greenley. “They know at MDA they’re able to work on technologies that are going to go into orbit.
“So when they sign on, they are with us on this adventure.”