Israel Aerospace Industries Financial Figures for 2010

Mar 23, 2011

  • Net profit of $ 94 million, an increase of 54% compared to 2009
  • Sales of $ 3.15 billion, an increase of 9% compared to 2009
  • Backlog of $ 8.9 billion, an increase of $ 1 billion since the beginning of the year (13%)
  • Cash flow from current activities of $ 449 million



Chairman of IAI's Board of Directors, Yair Shamir


IAI's CEO, Itzhak Nissan

Backlog- In 2010 IAI's new contracts with customers amounted to $ 4.4 billion, and, accordingly, backlog orders experienced a $ 1 billion growth from the beginning of the year and reached $ 8.9 billion. Exports comprise 84% of the backlog orders.

Sales for 2010 reached $ 3.15 billion, compared to $ 2.9 billion for the equivalent period in 2009. Export sales (80% of sales) reached $ 2.5 billion, a growth of 12% compared to 2009. Sales to the defense market reached approximately $ 2.4 billion, an increase of 7% compared to 2009.  Sales to the commercial market reached approximately $ 769 million, an increase of 19% compared to 2009, reflecting a gradual recovery from the global economic crisis. 

Gross profit for 2010 reached $ 455 million, compared to $ 436 million in the same period in 2009, an increase of 4%. The increase in gross profit, notwithstanding the strengthening of the Shekel at a rate of 6% in 2010, stems from the profitability of IAI's projects, increased efficiency, and cost-cutting measures adopted by the company.

Research and development costs in 2010 reached $ 137 million (4.4% of sales), compared to investment in the equivalent period in 2009, which totaled $ 122 million (4.2% of sales), an increase of 13%. The company considers investment in research and development to be crucial to securing its future.

Marketing, administrative and general expenses in 2010 reached $ 204 million, compared to $ 193 million in 2009. The growth is attributable to increased marketing efforts in new markets and to the strengthening of the Shekel.

Net financial income in 2010 reached $ 44 million, which includes the sume of $ 34 million realized from the sale of Spacecom Ltd. shares, compared to $ 6 million in the equivalent period in 2009. 

Net profit in the reported period reached $ 94 million, an increase of 54% compared to the equivalent period in 2009.

Cash flow from current activities reached $ 449 million, compared to $ 209 million as of December 31, 2009. The improvement in cash flow reflects the company’s financial stability. 

Results for the Fourth Quarter in 2010:

The company's sales for the fourth quarter of 2010 reached $ 849 million, compared to $ 761 million in the same period in 2009, an increase of 12%. Export sales reached $ 671 million, a growth of 15% compared to the fourth quarter of 2009. Sales to the defense market in the fourth quarter of 2010 reached approximately $ 628 million, an increase of 10% compared to 2009.  Sales to the commercial market reached $ 221 million, an increase of 18% compared to the equivalent period in 2009. 

Gross profit for the fourth quarter of 2010 reached $ 124 million, similar to the performance in the fourth quarter of 2009.

Research and development expenses for the fourth quarter of 2010 reached $ 45 million, compared to $ 37 million in the same period in 2009, an increase of 20%.

Marketing, administrative and general expenses for the fourth quarter of 2010 reached $ 58 million, compared to $ 53 million in the same period in 2009, an increase of 9%.

Net financial income for the fourth quarter reached $ 12 million, compared to $ 11 million for the equivalent quarter of 2009.

Net profit for the fourth quarter totaled $ 14 million, compared to $ 8 million in the same period in 2009, an increase of 68%.

Upon the publication of Israel Aerospace Industries’ financial statements for the year ended December 31, 2010, the Chairman of IAI's Board of Directors, Yair Shamir, said: “The company’s sales have grown this year by 9% compared to 2009. The growth stems from an increase in export sales, in both the defenseand commercial markets. The growth in defense market sales stems from projects entered into this year, and in preceding years.  The growth of the company’s sales to the commercial market indicates the start of the market’s recovery from the global crisis – especially in the fields of passenger aircraft conversions and overhauls.

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.  The setting in motion of the privatization process is called for, subject to a decision by the Government of Israel".

IAI's CEO, Itzhak Nissan, said: “The company's net profit of $ 94 million, exceeding by 54% profit for 2009, is the outcome of the continued measures adopted by the company to increase efficiency, and reflects the company's strength in a year when the commercial market hasn't reach yet its level prior to the global crisis.  The company's management, which attributes importance to the development of new and unique products using state-of-the-art technologies, increased investment in research and development by 13% compared to 2009. The company also continued to set aside resources for investments in strategic projects such as the G250 and heavy UAV's (in addition to the $ 137 million internal Research & Development). Furthermore, the company continued to allocate resources for early retirement of employees, with an eye toward the long term benefits. In 2010, 261 employees retired from the company at a cost of $ 56 million."

Nissan added: "Israel Aerospace Industries continues to present innovative "game changing" products, achieving customers appreciation and new orders. The company's efforts to develop innovative products enabled it to penetrate new markets and to grow by 13% in export sales and 18% in export backlog orders. Backlog orders in a total of $ 8.9 billion cover over two and a half years of operations and reflect the company's economic and technological strength."

IAI's Chief Financial Officer, Menashe Sagiv, noted that the growth in the company's cash flow from current operations, from $ 209 million in 2009 to $ 449 million in 2010, and growth in cash flow and cash balance in the sum of $ 1.6 billion, testifies to the company's financial strength and to its ability to invest in different ventures and acquisitions when required to do so.

Sagiv, who is scheduled to retire from the company, said: "I believe in IAI's continued growth and prosperity and wish it success in the future."



Summary Balance Sheet:

As of 31.12.2010

As of 31.12.2009

In USD millions

%   of the Balance Sheet

In USD millions

% of the Balance Sheet

Total balance sheet

4,465

100

3,979

100

Current assets:

3,488

78

2,981

75

Cash and cash equivalents and short term investments

1,635

37

1,278

32

Current liabilities

3,114

70

2,578

65

Equity capital

773

17

716

18

A summary of the business results (in millions of USD):                                                                                                           

 

For the 12 month period ending on December 31

For the 3 month period ending on December 31

 

2010

2009

2010

2009

 

In USD millions

%

In USD millions

%

In USD millions

%

In USD millions

%

Sales

3,148

100

2,881

100

849

100

761

100

Gross profit

455

14

436

15

124

15

123

16

R&D expenses

137

4

122

4

45

5

37

5

Retirement costs

56

2

46

2

17

2

18

2

Net profit

94

3

61

2

14

2

8

1

For further details please contact:
Doron Suslik
Deputy Vice President of Communications
Tel.: 03-935-8509
Fax: 03-935-8512
Email:
hpaz@iai.co.il





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