Aerospace industry, Magellan and the other possibilities

Canadian aerospace industries continues to create products and integrate into aerospace industries worldwide.

discovery shuttle

Canada’s Aerospace industries remain one of its most significant manufacturing sectors. Combining global relationship, high-quality jobs, and technology, it fits well into Canada’s drive to become a global leader. Magellan Aerospace Corporation demonstrates most of those initiatives and policies in its business relationships and ventures. Poised as a global enterprise it integrates products into aerospace industries worldwide. Its decisions lately have been making analysts take note of its stock. For several years it has had the label of a stock to hold. Recently in August 2018, a group of analysts came to a consensus and raised it to a buy rating.

What Magellan does

Magellan Aerospace Corporation makes complex assemblies of aircraft and aeroengines. It designs system solutions for manufacturers of engines and aircraft in the defense and space arenas. The company has been known to produce or provision wire strike protection systems, aeroengines, rockets, aerostructures, power generation, space and sand castings. Magellan also does support materials as well. The company has a philosophy of taking calculated risks.  It seeks out opportunities in the early stages of an aerospace project for a long-term relationship. It looks for Original Equipment Manufacturers (OEM) for strategic partnerships. Magellan thinks in terms of solutions, automation and alignment.

Recent ventures

Delivery of thermal blankets for the RADARSAT Constellation Mission to MDA (Maxar Technology Company) in late September reminded everyone in the markets that Magellan Aerospace Corporation participates in many space ventures on many levels. The thermal blankets keep spacecraft from freezing while in the realms of space. Such a simple, elegant basic item, but one necessary for all spacecraft. The market experts defined it as a major contractual milestone. Along with the blankets Magellan has for the Canadian Space Agency, the company also delivered three satellite buses, three payload module structures, launch vehicle adaptors, ground support equipment and software. Furthermore, it improved surveillance for disaster management, ecosystem monitoring, and maritime observations, which means better data that can help make better decisions when it comes to allocating budget from taxpayers money.

In May 2018 Magellan revealed a major collaboration with University of Manitoba due to a $625,000 Research Chair award in satellite development. It obtained a contribution of $120,000 for the second chair in Design Engineering. In October 2018 Magellan revealed it became licensed to join a set of global network foundries that manufacture cast parts by the advanced A20X TM aluminum alloy technique. Partnering with Aeromet International Ltd. means access to a significant number of aerospace and defense clients at a global level.

The numbers

Changes in projects and projections have made Magellan Aerospace a buy. (Source)

Magellan Aerospace Corporation’s stock classified as a hold in the past. Its many ventures mean it had to take time to develop the numerous relationships necessary to get into the global supply chains. As some projects ended Magellan continued to develop other lines, so analysts moved it to a buy. Its financial results from Q2 listed in Canadian dollars with the adoption of IFRS 15 stated a sum of $241.2 million. When comparing to the second quarter of 2017, it did have a $10.8 million-dollar decline.  In 2017 the gross profit and net income in the second quarter came in at $45.6 million and $19.9 million respectively. The second quarter in 2018 reported a gross of $41.3 million and a net income of $23.5 million.

Disruption

With vertical integration growing in aerospace markets Magellan may end up bumping against Boeing. Boeing and Safran allied creating a disruption in the supply chain for the APU market. A peak in single-aisle aircraft rates has been expected by 2021. Global defense markets have continued to increase as well as high-end jet markets have increased demands, signaling that the Aerospace industry markets will grow.

On the horizon

Magellan Aerospace Corporation preference for alliances may help further integrate the composite graphene into the aerospace industry. Currently used in semiconductors, an English university has conducted studies on the potential of the material, with the results revealing that its thinnest known material is 100 times stronger than a diamond. Furthermore, it is also able to conduct electricity and heats much better than copper does.

There are many exciting things going on in the aerospace industries on nearly all levels. Well-known companies have begun disrupting well-established lines of supplies and suppliers. New technology and startup firms have the advantage of not being weighed down by past obligations. Grabbing on to new technologies and supplying established aerospace companies may offer the fuel needed for the aerospace companies of the future. Like Magellan Aerospace Corporation, many companies have become much more global in nature and with a tendency to form alliances may mean a global space force in the making.

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