Israel Aerospace Industries has seen a fall in sales in 2009 from 2008 and has attributed this drop to the economic crisis affecting the company’s commercial aviation business.
According to a company statement, the sales figures for 2009 are $ 2.9 billion in comparison to $ 3.6 billion in 2008. Sales in the fourth quarter of 2009 amounted to $ 761 million, lower than the sales for the same period in 2008, which came to $ 803 million.
Gross profit too was lower in 2009 at $436 million, compared to $ 509 million in 2008. But the ’09 fourth quarter saw indications of the gross profit of the company doing better at $ 123 million, higher than the $ 119 million in the same period in 2008. The company credits improvement to ‘steps taken by company management to increase efficiencies and consolidate operations’.
Net profit too saw a fall, from $ 91 million in 2008 to $ 61 million in 2009, with the ’09 fourth quarter generating $ 8 million. Yair Shamir, Chairman of the IAI board, said “IAI’s net profit of $61 million, attained in a year of worldwide financial crisis which severely affected the company’s commercial sector, attests to IAI’s stability and to our significant contribution to the defense market.”
But the company’s backlog has seen an increase of $ 0.8 billion to $ 7.9 billion. IAI attributes this increase to ‘significant business deals that were completed in the military sector’.
President and CEO of IAI, Itzhak Nissan, said, “2009 was a record year for new contracts signed by IAI. New contracts totaled $4.3 billion, 85% of which were with foreign customers. The company’s backlog reached $7.9 billion,” adding, “As of March 15th, 2010, IAI’s backlog had reached a new record of $8.8 billion, a result of the fact that IAI has so far signed contracts worth $1.6 billion to develop and supply an array of innovative technologies since the beginning of 2010. These technologies would not be possible without IAI’s significant investments in research and development in recent years.”
IAI invested $ 122 million in research and development in 2009, a little lower than the figure of $ 127 million in 2008.
“Despite the crisis, IAI is continuing to invest funds in developing new, innovative products and advanced technologies, to ensure the company’s future and its development,” said Nissan, also adding, “Approximately 77% of IAI’s sales are exported to customers throughout the world and encompass a diverse array of products. Despite the global economic crisis, IAI increased its sales to the military market and successfully increased its gross profit margin from 15% of sales in 2009, compared to 14% of sales in 2008.”
Notably, this year IAI tested its Arrow Weapon System, destroying a target missile and also unveiled its new G250 business jet. The Israel Air Force also inducted the new IAI Eitan Unmanned Aerial Vehicle (UAV) into its fleet.