Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) today reported the doubling of its net profit for the third quarter of 2013, and that its orders backlog rose to a record $10.6 billion.
Revenue rose 24% to $930 million for the third quarter from $749 million for the corresponding quarter of 2012, and net profit rose 121% to $31 million from $14 million. The orders backlog rose by $1 billion from January to an all-time high of $10.6 billion at the end of September. Most of the net profit increase was due to a non-recurring gain from the first-time consolidation of an investee and deferred tax gains from the increase in the tax rate.
IAI attributed the revenue growth from higher sales of executive jets, and higher sales from its Systems Missile and Space division (from the launch of Amos 4 communications satellite), and from the Military Aircraft division. This growth was partly offset by lower sales from the conversion of passenger aircraft to cargo and refueling aircraft configurations by the Bedek Aviation division.
The proportion of exports fell to 68% of total sales in the third quarter from 76% in the corresponding quarter, and the proportion of military sales fell to 68% of total sales from 72%. The company said that the launch of the Amos 4 satellite in the third quarter was responsible for both the increase in the proportion of domestic and commercial sales.
IAI increased its R&D spending 40% to $41 million in the third quarter from $29 million in the corresponding quarter.
Cash flow from operations was $44 million for the third quarter, compared with a cash outflow of $284 million in the corresponding quarter. IAI's cash and cash equivalents and investments in short-term (liquid) securities rose by $634 million from January to $2 billion at the end of September.
IAI chairman Rafi Maor made a point of noting, "Unlike other exporters, 95% of the company's employees are located in Israel and it pays full tax to the State without any benefits or tax shelters". He warned, "The cutbacks in the defense budget and the pressures in global markets, which are intensified by the low US dollar exchange rate, present us with daily and complicated challenges with which we will have to deal in the coming year."
Published by Globes [online], Israel business news - www.globes-online.com - on November 28, 2013
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