- $ 877 million sales in third quarter – 10 per cent increase compared to 2007 third quarter
- $ 2.8 billion sales for the period (January-September) – 17 per cent increase compared to corresponding period in 2007
- $ 16 million third quarter net profit
- Back log reaches $ 7.4 billion – Reflects two years worth of sales
- $ 164 million positive cash flow in nine months
Israel Aerospace Industries (IAI) announced a 2008 third quarter net profit of $16 million (after a $16 million provision for employee-related expenses, compared with $6 million employee-related expenses for the third quarter of 2007).
Company sales for the third quarter of 2008 reached $ 877 million, compared with $797 million for the third quarter of 2007, an increase of 10 per cent.
IAI's back log of orders totaled approximately $ 7.44 billion as of September 30, 2008.
Following approval of the 2008 third quarter financial statements by IAI Board of Directors, IAI Chairman, Yair Shamir, said: "IAI achieved a 17 per cent increase in sales for 2008 third quarter compared to the third quarter of 2007 both in the civil and in the military markets. Sales to the civil market accounted for 40 per cent. Despite the slowdown in the international civil aviation market and the difficulties still ahead, IAI will continue to strengthen its position among existing customers, while exploring new businesses and opportunities". Shamir said, "IAI enjoys financial robustness, unique product lines and a diverse clientele. These factors help prepare IAI to cope with the global economic turmoil. We also hope to capitalize on business opportunities that will present themselves as a result of the situation."
IAI CEO, Itzhak Nissan, said: "During the reporting period, IAI received new orders exceeding $ 2.8 billion. IAI continues to invest, from internal resources, in developing new products both in the civil market and in the military market."
From the beginning of 2008 IAI has continued to demonstrate impressive technological achievements, including successful launches of the "TECSAR" satellite and the "AMOS 3" communications satellite. Furthermore, IAI is developing a new G-250 executive jet in collaboration with Gulfstream Aerospace headquartered in the US. IAI is continuing to focus on developing international partnerships and on enhancing its presence in global markets. Agreements have been signed for the establishment of a joint company with TATA Ltd. of India, the establishment of a joint company with Synergy of Brazil, and a cooperation agreement in Europe with Rheinmetall Defence AG of Germany.
The weakening of the dollar during the reporting period has adversely affected the operating activities of IAI, whose major income is in USD. IAI continues to carry out numerous activities to increase efficiency and project management and control with a view to minimizing the anticipated adverse effect from the global market crisis.
IAI is announcing $161 million in profit for the first nine months of 2008, before expenses relating to early retirement of employees, totaling $ 41 million for the period. This profit exceeds the profit for the third quarter of 2007.
During this quarter a dividend of NIS 212 million was paid to the State of Israel for the years 2006 and 2007.
Chief Financial Officer Menashe Sagiv said: "Cash flow from current operations in the reporting period totals $164 million compared to $129 million in the same period last year. The Company's financial expenses for the quarter total $ 41 million, a direct result of the weakening of the USD by 11 per cent from the beginning of 2008 to September 30, 2008. This resulted in a $43 million revaluation of Shekel liabilities in the reporting period."
The Company has conducted and continues to conduct currency hedging operations which have reduced the effect of the revaluation in the period.
IAI achieved a 17.5 per cent return on capital over the last 12 months.
The Company's shareholders' equity continues to grow as a result of internal activity and not from acquisitions and mergers.
Below are balance sheet data:
|
|
As of September 30, 2008 |
As of September 30, 2007 |
|
|
In Millions of $ |
% of the Balance Sheet |
In Millions of $ |
% of the Balance Sheet |
|
Total balance sheet |
3,566 |
100 |
3,356 |
100 |
|
Current Assets |
2,712 |
76 |
2,584 |
77 |
|
Of which: Cash and cash equivalents and short term investments |
1,213 |
34 |
1,228 |
37 |
|
Current Liabilities |
2,322 |
65 |
2,202 |
66 |
|
Long Term Liabilities |
607 |
17 |
552 |
16 |
|
Of which: Debentures |
*
264
|
7 |
262 |
8 |
|
Shareholders’ equity |
637 |
18 |
601 |
18 |
* Shareholders' equity less dividend paid to the State of Israel, amounting to $ 62.5 million
|
|
For the nine month period ended
September 30
|
For the three month period ended
September 30 |
|
|
2008 |
2007 * |
2008 |
2007 * |
|
|
$ |
% |
$ |
% |
$ |
% |
$ |
% |
|
Sales |
2,782 |
100 |
2,387 |
100 |
877 |
100 |
797 |
100 |
|
Gross Profit |
390 |
14 |
353 |
15 |
117 |
13 |
127 |
16 |
|
R&D expenses |
88 |
3 |
67 |
3 |
26 |
3 |
22 |
3 |
|
Administrative, marketing and general expenses |
146 |
5 |
124 |
5 |
48 |
5 |
39 |
5 |
|
Other expenses / (income), net |
(5) |
(0) |
2 |
0 |
1 |
0 |
2 |
0 |
|
Profit before employees' retirement |
161 |
6 |
160 |
7 |
42 |
5 |
64 |
8 |
|
Employees' retirement |
41 |
1 |
24 |
1 |
16 |
2 |
6 |
1 |
|
Income from ordinary activities |
120 |
4 |
136 |
6 |
26 |
3 |
58 |
7 |
|
Financial income / (expenses), net |
(41) |
(1) |
1 |
0 |
(3) |
0 |
(9) |
(1) |
|
Affiliated companies |
0 |
0 |
0 |
0 |
1 |
0 |
1 |
0 |
|
Tax credit / (tax) |
(4) |
0 |
(39) |
(2) |
(8) |
(1) |
(10) |
(1) |
|
Net income |
75 |
3 |
98 |
4 |
16 |
2 |
40 |
5 |
* Restated in accordance with IFRS