Rafael: Profits Soaring Despite Flat Sales

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VADM (Ret.) Yedidia Yaari, Rafael’s President and CEO

Rafael Advanced Defense Systems Ltd. ended the year 2010 with a record net profit of $170 million, with orders totaling $1.9 billion, an order backlog of almost $3.5 billion and sales of $1.8 billion. As in 2009, 74 per cent of the sales were derived from export orders.

VADM (Ret.) Yedidia Yaari, Rafael’s President and CEO

“Our achievements in 2010 were the result of Rafael’s ability to implement its goals, while adjusting to changing condition that demanded quick solutions, these achievements, joined by a positive start of 2011 will create further growth” said VADM (Ret.) Yedidia Yaari, Rafael’s President and CEO. Rafael’s order backlog in 2010 was $3.5 billion, comprising 1.8 years of sales activity, of which 74% is intended for export to countries in Europe, Latin America, the U.S. and the Far East.

Israel’s Rafael Advanced Defense Systems continued its growth and increased net profit in 2010, as reflected by the financial report the company published today. Despite a decrease in sales compared to 2009, Rafael posted a record profit $170 million (%9.2 of sales) this year but this net profit resulted from financing revenues resulting from the sale of its subsidiary Medingo, which significantly contributed to Rafael’s profits. Medingo, a developer of micro pump insulin delivery system, was sold the Swiss based pharmaceutical company Roche for $160 million. Rafael’s interests in Medingo were managed through its civil subsidiary, responsible for civilian derivatives of its advanced technology. Currency hedging and research and development activities also contributed to Rafael’s net profit. Rafael provides the national defense-development laboratory for certain defense related areas in Israel, offering Israel’s defense establishment the most advanced systems available.

Rafael achieved its target sales figure for the year, against falling global defense budgets and demand in some of its major markets; Spyder and Iron Dome air defense systems, Spice air-to-surface weapons, Spike electro-optical-tactical precision missile systems, Litening and Reccelite navigation, targeting and tactical reconnaissance pods were among top sellers in aviation related products while various types of armor and protection systems, remote-controlled weapon stations, breaching munitions comprised the land systems sales. Space propulsion activities were also among the fields driving revenues in 2010.