Elbit Systems, Israel’s leading defense systems manufacturer has increased revenues in the fourth quarter to US$798.7 million, indicating 11.8% growth, compared to $714.7 million in the fourth quarter of 2009. The company reported today its 2010 revenues amounted to $2,670 million; Net profit of $183.5 million and Backlog of orders over $5.4 billion.
This positive milestone for the company followed a tough year, which saw its revenues decline by $162 million in a year to year comparison (5.7% compared to 2009). The main attributes for lower revenues in 2010 represented several programs in the company’s land systems and UAVs operations. Winding-up of the M-60 upgrading project in Turkey, where Elbit Systems was providing an all-new turret control, optronics and electronics; decreased revenues from the Bradley project in the United States, where Elbit provides mission computers and vetronics and from the Watchkeeper project in the U.K. based on the company’s Hermes 450WK platform, all contributed to the pressure in 2010.
“2010 was a challenging year,” Joseph Ackerman, President and CEO of Elbit Systems commented, Despite the difficult year, Ackerman points to the long term effects for the company “we witnessed resumed growth in our backlog, while at the same time we achieved increased revenues levels in the fourth quarter.”
The Company’s backlog of orders for the year ended December 31, 2010 totaled $5,446 million, (up $402 million from $5,044 million reported in the previous year.) 72% of the current backlog is scheduled to be performed during 2011 and 2012.
The increase in the Company’s revenues was driven mainly by the electro-optics and airborne systems areas of operations. Despite the tough year, the company increased its research and development spending in 2010 to $234 million, representing over 8% of gross revenue.
“Most important for 2010 was the solid execution of our Merger and Acquisition strategy in support of our long-term goals. 2010 was a year of building on our internal competencies while acquiring complementary technologies and products that broadened our offerings to the defense market.” In 2010 and the first quarter of 2011 Elbit Systems consolidated its acquisition of three companies of the Mikal group, (Soltam, Saymar and ITL), solidified 100% holding of Elisra, strengthened its U.S. subsidiary with Texas based M7 Aerospace service company, and acquired two Brazilian companies Ares and PEO, bolstering its position in the growing Brazilian market, where the company recently announced two important contracts – the delivery of unmanned turrets for Brazil’s new armored vehicle and supply of Hermes 450 unmanned systems for the Brazilian Air Force.
While the European market becomes tougher, Elbit Systems’ domestic activity (in Israel) has grown steadily in recent years, reflecting increased defense spending in Israel. Elbit Systems’ domestic revenues grew from 22% ($627.3 million) in 2009 to 24% in 2010 ($651 million). The current backlog represent 26% of domestic orders (about $1.416 billion).Recent acquisitions of domestic companies has also contributed to the local activity, as some of these companies maintained ongoing programs with the Israel MOD for years.
“Our recent acquisitions open a number of new doors for us” Ackerman continued, “first, they add additional R&D capabilities in a number of new areas, which can potentially be beneficial across the entire breadth of our operations. Second, the acquisitions strengthen and expand our presence in the Training and Simulation, Artillery and MRO areas. Finally, our M&A and related activities enable us to expand our operations in strategic regions, notably Brazil and Australia. Looking ahead, as we begin to exploit the synergies of this group of new acquisitions”.