Friday, February 22, 2019

The Next Three Important Dates For the Canadian Space Industry

          By Chuck Black

The 2019 Canadian Federal Budget (expected to be tabled in the Canadian House of Commons on March 19th, 2019), along with the fourth quarter 2018 report (expected on February 28th, 2019) and the year-end stockholder meeting (currently scheduled for May 8th, 2019) of Westminster CO based Maxar Technologies, are currently the hottest topics of gossip among those who focus on the Canadian space industry.

How did that happen?

It's because Brampton ON based MDA is both the maker of Canada's iconic Canadarm and a Maxar subsidiary. Since the formation of the Canadian Space Agency (CSA) in 1989, the space industry in Canada has been wrapped around Federal government funding for its favorite contractor.

This state of affairs is in the midst of changing. But change comes slowly to the industry and many are hoping that change will be delayed or superseded by announcements deriving from one or more of those events.

As outlined in the February 20th, 2019 CTV News post, "2019 federal budget to be tabled March 19: Morneau," Finance Minister Bill Morneau "will introduce the Liberal government's pre-election budget on March 19 in a document expected to touch the issues of prescription drug costs, skills training for workers and helping more millennials get into the housing market."

As part of the budget, the government may or may not announce a commitment to the Lunar Orbital Platform Gateway (LOP-G),  a US based initiative with a Canadian component manufactured by Maxar Technologies and covered previously in this blog, most recently in the the January 10th, 2019 post, "That Canadian Space Plan Where We Give Most of the Funding to a Failing, Foreign Owned Maxar is Dumb."

An announcement in favour of the LOP-G would be a boon to Maxar/MDA since the company would then be almost guaranteed to receive a multi-billion dollar contract to build a new "next-generation" Canadarm for the LOP-G.

But that might also not happen because, as noted most recently in the January 30th, 2019 post, "Why did Maxar Subsidiary SSL "Terminate" its Participation in the DARPA GEOsynchronous Satellite Servicing Program?," Maxar has been having a bad year and governments don't want to be perceived to be supporting failing, foreign owned companies.

As for the other two dates, they will likely be the two last chances for a failing Maxar to put its fiscal house in order.

According to the February 7th, 2019 Maxar press release, "Maxar Technologies Fourth Quarter 2018 Investor Call Scheduled for Thursday, February 28 2019," new Maxar President and CEO Daniel Jablonsky and recently appointed Executive VP and CFO Biggs Porter will host an earnings conference call to review Maxar's fourth quarter results, on February 28th, 2019.

Jablonsky and Porter (or their replacements, if nothing improves after after the fourth quarter results are announced) will also likely be around for the year-end stock holder meeting which, according to the January 29th, 2019 Maxar press release, "Maxar Technologies Announces Date of Annual Meeting of Stockholders," will be held on May 8th, 2019.

According to the February 13th, 2019 Seeking Alpha post, "Maxar Technologies: Betting On Space," Maxar needs to announce a cut of the quarterly stock dividend plus the successful sale of Palo Alto CA based Maxar subsidiary SSL for a reasonable amount of money, perhaps around $500Mln US ($660Mln CDN), in order to turn around the company.

Of course, even a big Maxar turnaround might not shake any LOP-G commitments from an embattled Federal government gearing up for a fall Federal election.

The Justin Trudeau Liberals might simply have too much on their plate to worry about any large but failing multi-national corporation other than the Montreal PQ based SNC Lavalin.

But that would be another story entirely.
Chuck Black.

Chuck Black is the editor of the Commercial Space blog. 

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