Company could face uphill battle with future fighter work if government ditches F-35
TORONTO—Magellan Aerospace Corp. reached new heights in the third quarter of 2015.
The aerospace components company recorded the highest revenue in its history, pulling in $236.2 million, an increase of 17 per cent over the same quarter last year. The company has been enjoying the benefits of the lower loonie, riding the favourable exchange rate to a 10 per cent revenue increase through the first 9 months of 2015. Magellan also boosted its earnings to $37.8 million, or 65 cents per share in the third quarter, up from $28.3 million, or 49 cents per share a year ago.
Among Magellan’s highlights for the quarter was progress on its contract with MacDonald, Dettwiler and Associates Ltd., which is a prime contractor for Canada’s RADARSAT Constellation Mission. The company achieved key milestones toward the delivery of its first two payload modules to MDA.
Last month’s federal election has allowed some uncertainty to seep into one of Magellan’s projects, however. If new Prime Minister Justin Trudeau’s outspoken opposition to future procurement of Lockheed Martin’s F-35 Lightening II continues, the company could stand to lose significant new work opportunities.
“The incoming government has made statements that are not supportive of maintaining the previous government’s position on the future procurement of the F-35,” Magellan said. “In the event the Canadian government does not proceed with this planned procurement, the corporation anticipates that current and potential new work opportunities could be significantly reduced or eliminated.”
As Magellan currently employs approximately 150 people in direct support of the program and expects to increase that number three to four times as Lockheed Martin ramps up to full production over the next few years, the impact of Trudeau making good on his campaign promise could be significant for the aerospace firm.