MDS Inc. of Mississauga, Ont. announced its financial results this morning. MDS is the parent company of MDS Nordion, the Kanata, Ont.-based company which buys all of the medical isotopes produced by Atomic Energy of Canada Ltd.'s at the Crown corporation's Chalk River Laboratory.
For the three months ending April 30, MDS Nordion had an operating profit of US$23 million and net revenue of $65 million. That was down from the same quarter last year of $24 million and $80 million. MDS also had this to say in its press release this morning:
After the end of the quarter, in May 2009, Atomic Energy of Canada Limited (AECL) announced that its National Research Universal (NRU) reactor would be out of service for at least three months. Based on historical EBITDA trends related to NRU-supplied isotopes, MDS expects the financial impact of this shutdown to reduce MDS Nordion's adjusted EBITDA by approximately $4 million for every month the NRU is out of service. MDS is assessing plans to reduce costs over the extended shutdown period. MDS Nordion continues to deliver positive EBITDA from sterilization technologies and radiopharmaceutical product and service lines.
MDS continues to work to secure a long-term reliable supply of medical isotopes. In 1996, MDS Nordion contracted with AECL to complete and commission the MAPLE reactors, which were intended to replace the NRU. In May 2008, this project was unilaterally discontinued by AECL and the Government of Canada. MDS invested over $350 million in the MAPLE project, and believes that the completion of the MAPLE reactors is the best solution to provide global medical isotope supply. More recently, MDS Nordion urged the AECL and Canadian Government to consult with international experts and obtain their assistance to activating the MAPLE project to address the current medical-isotope supply shortage. In addition, MDS Nordion is examining longer-term supply alternatives and announced in the second quarter its collaboration with TRIUMF, Canada's national laboratory for particle and nuclear physics, to study the feasibility of producing a viable and reliable supply of photo fission-based Molybdenum-99.
This will have some relevance today. Last night, we reported: Prime Minister Stephen Harper says Canada plans to leave the production of medical isotopes to other countries — despite the fact that for a time last year, this country was producing nearly all such isotopes in the world.
“Eventually, we anticipate Canada will be out of the business,” Harper said Wednesday. [Read the rest of the story]
AECL — again, it's a Crown corporation so taxpayers stand behind its obligations — signed a deal with MDS Nordion guaranteeing a 40-year supply of medical isotopes. The MAPLEs were to produce that 40-year supply. MDS is suing AECL and Canada for $1.6 billion for cancelling the MAPLEs. What now will AECL and Canada owe MDS Nordion now that the prime minister has rather abruptly announced that Canada is out of the business altogether and will not — MAPLEs or no — honour its word to MDS Nordion to provide it with medical isotopes for the next 40 years?
MDS Nordion executives, as it happens, had already been scheduled to testify today at the House of Commons Standing Committee on Natural Resources (hashtag #RNNR for you Twitterers) where executives are expected to make the case for the MAPLEs. Both Liberal and NDP MPs are pushing the government to at least have international experts review AECL's decision to kill the MAPLEs.
Why is all this important? The medical isotopes at Chalk River help 2 million Canadian cancer and heart disease patients every year.
How does MDS Nordion reconcile this with what they say now?
http://anes.fiu.edu/Pro/s4ma1.pdf VIA http://www.physicsforums.com/showthread.php?t=270431
[page 2]
“Active commissioning of the facilities has been on hold since July 2000 after problems were encountered during testing of the MAPLE 1 shut-off rod operation. Investigation into the root cause of the problems identified some workmanship issues in the construction of the facilities that had not been captured by the quality management system in place during construction. This led to the detailed re-inspection of all MAPLE reactor and processing facility systems. Since July 2000, activities have been underway to correct the problems with the operation of the shut-off rods, and to address the workmanship issues that were identified. These activities are nearing completion. At no time was there any impact on safety to workers, the public or the environment.
Commercial production of medical isotopes in the new facilities is now scheduled for 2003, more than two years later than the original project objective. …”
They said it was supposed to be up and running by 2003. It wasn't. Nor by 2008, when the government finally pulled the plug. And THEY are suing the government for cancelling the MAPLEs? Incroyable!
To be fair, I think you've got the who-did-what slightly wrong. MDS Nordion hired Atomic Energy of Canada Ltd. to build the MAPLEs. MDS Nordion invested $350 million in the project and said it would pay the whole shot to have these things built even though the Crown corporation was building them.
In May 2008, without consulting MDS Nordion, AECL announced it was ceasing development of the MAPLEs and the federal government backed up AECL.
MDS Nordion is suing the government and AECL for breaking its contractual obligation to build the MAPLEs and supply it with isotopes. MDS Nordion did not “build” the MAPLEs. It hired someone to do that and, in your excerpt, was reporting on how its contractor (AECL) was doing.
What would you do if you hired someone and paid them to build an addition on your house and, halfway through the project, they walked off the job and kept your money?
On the spur of the moment, I'd probably say what John Baird reputedly said [not to you personally].
I won’t spend too much time on verifying who built what, or who commissioned whom to build what, since my comment may not pass moderation muster. So why bother?
Anyway, as Montreal’s comedy team Bower and Blue sing, “c’est [toujours] la faute du fédéral” – in this case le fédéral Harper, no matter what.
So – I give up.
Yeah, I’m POd. I guess like all those clowns in the HoC, I too need time away from all this crap.
Or maybe I’ll come back to fight another day …