Aerospace Industries, Third Quarter: Net Profit on Rise

by time news

IAI continues its financial recovery with a slight increase in net profit in the last quarter. In the aggregate of the last nine months, the net profit is about $ 131 million compared to about $ 112 million in the same period last year.

IAI CEO Boaz Levy: “IAI presents another quarter of strong performance. This is despite a limited quarter in terms of activity days and the appreciation of the shekel, which greatly affects the company, whose 80% of its products are for export. This is the most profitable period in the company’s history and we present a net profitability of $ 131 million, representing a 17% increase in performance.

Among the notable achievements in recent times are the significant victory in the Carmel car project, which is a sign of IAI’s strength in the land world, the winning tender for the supply of assault missiles to the Estonian army, the contract to supply radars to the German army and the signing of an agreement with SIXAI. Military to the civilian dimension in a forward-looking manner.

“IAI’s participation, for the first time, in the Dubai Air Show last week is a historic event that illustrates the strength of the company and the tremendous potential of cooperation with the Gulf states. As part of the exhibition, IAI signed a series of agreements and deals with leading airlines and security companies in the region. “

Asterisk until the end of the year
However, it is worth noting a number of points in the quarterly report that ended in September. The operating profit of the military divisions in the third quarter of 2021 amounted to about $ 65 million compared to about $ 73 million in the corresponding quarter last year. That is, there is a decrease in the profit of one of the main sources of income of the company. This may be a point distortion for the quarter. Have to wait for the end of the year. As a result, there is also a decrease in net profit from $ 56 million, compared to about $ 70 million.

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Another point has to do with the backlog. The backlog of orders at the company as of September 30, 2021 amounted to about $ 12.1 billion, compared to about $ 12.6 billion at the end of 2020. That is, there is a gap of half a billion dollars that the company needs to complete by the end of December to finish with backlogs like last year.

A third point is a decrease in Elta’s revenue. A major revenue engine of the aerospace industry along with the Missile and Space Systems Division. Elta’s sales volume in the first nine months of 2021 amounted to approximately $ 1,097 million, compared to approximately $ 112,133 million in the corresponding period last year.

A decrease of approximately $ 26 million, mostly due to a decrease in sales in the Air Systems and Land Systems industry, and was partially offset by an increase in sales in the Air Defense and Marine Systems industry and in the Intelligence, ICT and other systems industry. About $ 330 million, compared to about $ 371 million in the same period last year, a decrease of about $ 41 million.

Geographical distribution
Almost 40 percent of the company’s sales come from Asia, not including Israel. Another 20 percent come from North America (mostly from the Civil Aviation Division). The third market is Europe with about 13 percent.

In a conversation I had with Boaz Levy, the company’s CEO, following the reports, he listed a number of challenges for 2022. First, U.S. activity. Levy recently appointed a VP for the subject, with the aim of improving the activities of subsidiaries in North America and in order to expand sales revenues to the American market.

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Another challenge is the Gulf States market. The company has recently signed a number of cooperation agreements in the Emirates. It is currently expected that these collaborations will generate revenue for the company in the future. The European market is also a challenge. The company recently closed a deal in Estonia and opened an office in London, with the intention of expanding revenues from the European market.

India is also a challenge for the future despite the company’s extensive activity in recent years in the domestic market. The Indians want a local application of technology and this requires the company to invest more in relationships with local suppliers.

Financial data
Net profit: an increase of 17% in the first nine months of 2021 to about $ 131 million compared to about $ 112 million in the corresponding period last year – which means: the most profitable period in the company’s history. An increase in net profit to approximately $ 31 million in the third quarter compared to approximately $ 30 million in the corresponding quarter last year.

EBITDA: A 16% growth in EBITDA in the first nine months of 2021 to approximately $ 361 million compared to approximately $ 311 million in the same period last year. EBITDA in the third quarter of 2021 grew by approximately 24% to approximately $ 109 million (approximately 10.5% of sales) compared to approximately $ 88 million (approximately 8.7% of sales), in the corresponding quarter last year.

Operating profit: Growth in operating profit of about 17% in the first nine months of 2021 to about $ 190 million (about 5.9% of sales) compared to operating profit of about $ 163 million (about 5.3% of sales) in the corresponding period last year. An increase in operating profit in the third quarter to approximately $ 52 million (approximately 5% of sales) compared with an operating profit of approximately $ 36 million in the corresponding quarter last year (approximately 3.6% of sales).

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Gross profit: An increase in gross profit of 7.5% in the first nine months of 2021 to about $ 500 million (about 15.6% of sales) compared to about $ 465 million in the corresponding period last year (about 15.1% of sales). An increase of about 13% in gross profit in the third quarter of 2021 to about $ 149 million (about 14.3% of sales) compared to about $ 132 million (about 13.1% of sales), in the corresponding quarter last year.

Sales: A 3.9% increase in sales to about $ 3,205 million in the first nine months of 2021, compared to about $ 3,084 million in the same period last year – this is the highest sales volume in the company’s history. The increase in sales is mainly due to an increase in sales of the Missile and Space Systems Division and the Military Aircraft Division, which was partially offset by a decrease in sales in the Elta Division. An increase in the company’s sales in the third quarter of 2021 to approximately $ 1,041 million compared to approximately $ 1,006 million in the corresponding quarter last year.

Research and development expenses: An increase in research and self-development expenses in the first nine months of 2021 to approximately $ 127 million, compared with approximately $ 117 million in the corresponding period last year. Expenditure on self-research and development in the third quarter was approximately $ 42 million, compared with approximately $ 46 million in the corresponding quarter last year.

The full report.

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