Israel Aerospace Industries reported today an increase of 54 percent in its net profit in 2010, compared to the net profit reported in 2009. Overall, the company reports net profit of $94 million, from annual sales of $3.15 billion. Part of the increase in net profit was attributed to the sale of IAI shares in its former subsidiary Spacecom, which contributed $34 million to the bottom line. In the past year the company increased sales by 9 percent over 2009, passing again the milestone of $3 billion sales per year (2007 and 2008 were IAI’s best year ever, with sales of $3.58 billion).
“The growth in sales and profit and the state of the company’s cash flow reflect IAI’s strength and its continued preparation for privatization.” said Chairman of IAI’s Board of Directors, Yair Shamir “The setting in motion of the privatization process is called for, subject to a decision by the Government of Israel”.
In fact, the orders intake through 2010 was $4.4 billion, increasing the backlog by one billion, to $8.9 billion by year’s end. This level reflects an increase of 13 percent from the beginning of the year. In 2010 IAI’s domestic operations reduced to 20 percent, mostly in defense business, while export activities surged to 80 percent ($2.5 billion) reflecting a mix of commercial aviation and military orders. Recovering from the economic crisis of 2009, IAI’s commercial aviation sales have increased by 19 percent in 2010, reaching about 769 million, derived primarily from passenger aircraft conversions and overhauls, both are considered precursors of recovering market trends.
Sales of defense systems increased 7 percent over 2009, amounting about $2.4 billion. Through the year IAI invested over 4 percent of its sales ($137 million) in research and development, increasing 13 percent over R&D investments in 2009. IAI’s CEO, Itzhak Nissan emphasized the company’s growth potential as the commercial market reaches full recovery. “Our performance reflects the company’s strength in a year when the commercial market hasn’t reached yet its level prior to the global crisis.” Nissan stated that, in addition to increasing R&D funding, IAI also continued to set aside resources for investments in strategic projects such as the G250 and heavy UAV’s. Gross profit reported in 2010 has increased by 4 percent over 2009, to $455 million. Gross profit growth was pressed down by the weakness of the US dollar against the Israeli Shekel. To stem cost increases, IAI implemented a company-wide profitability initiative, increasing efficiency, and implementing cost-cutting measures resulting in better margins.