MDA’s Radarsat-2 Revenue Expected To Rise in 2009

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  Space News Business

MDA’s Radarsat-2 Revenue Expected To Rise in 2009

By PETER B. de SELDING
Space News Staff Writer
posted: 06 March 2009
06:34 am ET






— MacDonald, Dettwiler and Associates (MDA) of said the benefits of owning the Radarsat-2 Earth observation satellite should become obvious in 2009 as the company realizes sales from Radarsat-1 customers upgrading to the more-capable Radarsat-2.

In a Feb. 26 conference call with investors, MDA Chief Executive Daniel E. Friedmann said about a half-dozen Radarsat-2 ground stations should be activated in the coming months. He said overall demand for Radarsat-2 imagery is expected to be strong even though the near-term prospects depend in part on hard-to-predict market developments such as the military presence in

Radarsat-2 became operational in April 2008 and many Radarsat-1 customers are upgrading their image-reception stations to receive the higher- resolution Radarsat-2 products. MDA has said it can take months from the time a ground station is ordered to when it is placed into operation.

MDA marketed Radarsat-1 through a company called Radarsat International and then divided the sales proceeds with the Canadian government, which owned and operated the satellite. But with MDA now supporting the operating costs of Radarsat-2, the company has an additional incentive to broaden the customer base.

“We have to operate the satellite whether we sell one image or a billion images,” Friedmann said. “At this point we have converted enough Radarsat-1 customers to Radarsat-2 to be more or less even on [operating profit] margins. As we move forward through the year, our margins will improve as our sales go up.”

Richmond, British Columbia-based MDA has made at least one big Radarsat-2 sale to a customer that did not already have a Radarsat-1 station. The sale, announced in November to a confidential defense intelligence agency, was valued at $11 million including the first 12 months of imagery purchases.

MDA’s Geospatial Services division, the former Radarsat International, reported 74 million Canadian dollars ($59.1 million) in revenue in 2008, up 2.8 percent from 2007.

The company’s entire Information Systems division, which includes satellite components and other commercial and Canadian government space- hardware contracts – notably the next-generation Radarsat Constellation work – reported revenue of 400.6 million Canadian dollars in 2008, up 11.4 percent from 2007.

Friedmann, who in the past has not been hesitant to criticize the Canadian government’s lack of space-policy direction, said the current government and new leadership at the Canadian Space Agency have both sent concrete signals that Canada’s space industry needs increased government backing to remain competitive.