ISRAEL AEROSPACE INDUSTRIES 2008 FINANCIAL REPORT
• Sales in 2008 reach $3.6 billion, compared to $3.3 billion in 2007, an increase of 9 percent
• $91 million net profit in 2008, compared to $118 million in 2007, a decrease of 23 percent
• Profit before early retirement expenses reaches $195 million, compared to $157 million in 2007, an increase of 24 percent
• Backlog as of December 31, 2008, reach $7.1 billion, reflecting two years worth of sales
• Cash flow from current projects reaches $123 million
ISRAEL AEROSPACE INDUSTRIES 2008 FOURTH QUARTER FINANCIAL REPORT
• Sales reach $803 million, compared to $912 million in the fourth quarter of 2007, a decrease of 12 percent
• Net profit for fourth quarter totals $16 million, compared to $21 million in the fourth quarter of 2007, a decrease of 24 percent
Ben Gurion International Airport, Israel, March 31, 2009 – Israel Aerospace Industries’ (IAI) sales in 2008 reached $3.6 billion, as compared with $3.3 billion in 2007, an increase of 9 percent. 2008 net profit reached $91 million, compared to $118 million in 2007, a decrease of 23 percent. IAI’s backlog as of December 31st, 2008, reached $7.1 billion, reflecting two years worth of sales. Cash flow from current projects reached $123 million.
In the fourth quarter of 2008, sales reached $803 million, compared to $912 million in the fourth quarter of 2007, a decrease of 12 percent. 2008 fourth quarter net profit reached $16 million. Before taxes, the company earned $30 million in the fourth quarter of 2008, compared to $9 million in the fourth quarter of 2007, an increase of 233 percent. In the fourth quarter, $17 million was allocated for employee early retirement expenses.
At the board meeting in which IAI’s 2008 financial figures were confirmed, Yair Shamir, Chairman of the Board, said: “IAI grew in 2008 by 9 percent compared to last year, while 81 percent of company sales are to foreign customers. Sales to the civilian market make up 39 percent of total sales. Sales in the defense sector grew by 14 percent compared with a 1 percent growth in the civilian market. The decrease in civilian market sales in the fourth quarter reflects the grave worldwide financial crisis. To IAI, financial strength, a wide product range, and diverse customers are key to helping the company stand firm during this worldwide economic rollercoaster. There are, of course, also business opportunities that may arise as a result of the current situation.”
Itzhak Nissan, IAI’s President & CEO said: “In 2008, IAI’s operating profit totaled $195 million before expenditures on the early retirement of some of the workforce, in comparison with $157 million in 2007, an increase of 24 percent. We earned this profit despite the revaluation of the shekel in 2008 (which at one point was as low as 3.23 NIS to the US dollar) and the decrease in the interest rate. This profit is a result of the company’s ongoing changes to its business practices. These changes include an overhaul in our pricing process, risk management, project reviews and chains of responsibility within IAI management, and an increase in efficiency when it comes to acquisitions and interactions with our suppliers. Such changes will help the company face the current economic crisis and continue to succeed in the future. The net profit in 2008 totaled $91 million.
In 2008, IAI received $3.7 billion in new orders. IAI encourages new product development within its various divisions. The costs of such independent research and development have increased by 21 percent in comparison with last year.
During 2008, IAI continued to demonstrate impressive technological achievements, including the successful launching of its TECSAR satellite and the Amos 3 communications satellite. In addition, the company is jointly developing a new G250 business jet with the American company, Gulfstream.
IAI continues to focus on the development of international cooperative endeavors and on a bigger presence in the worldwide market. As such, IAI and the Indian company TATA have agreed to create a joint company. An agreement has also been signed to set up a joint company with the Synergy Corporation in Brazil, and another joint venture has been created with the German company Rheinmetall AG.
The company is preparing for a decrease in activity in the civilian market and is working on a number of other projects with increased efficiency and management attention, so as to minimize the impact of the global economic crisis.”
IAI’s Vice President and CFO, Menashe Sagiv, said: “The cash flow from operations during 2008 totals $123 million. The company’s financial expenses in 2008 total $28 million. The expenses were affected by the decrease in the interest rate and the crisis in the treasury market, which were updated according to the actuarial obligation. IAI conducted currency hedging operations which have reduced the effect of the revaluation. IAI has had an equity return of 14 percent over the last 12 months.
It is important to note that the increase in IAI’s capital stems from the company’s internal activity, and not from acquisitions and mergers. The company has a current ratio of 1.15, which reflects its financial strength in comparison to other similar companies in Israel and worldwide.”
[Release issued by IAI]