Rafael Advanced Defense Systems Ltd. today reported an all-time high net profit of NIS 633 million in 2010. Sales totaled NIS 7 billion and the orders backlog was NIS 12.6 billion at the end of the year.
Rafael attributed part of the net profit to financing profits and the sale of medical device subsidiary Medingo Ltd., which contributed NIS 170 million to Rafael's profit. This was partially offset by the strengthening of the shekel against the dollar last year, even though the company hedged against some of the currency risk.
Rafael expressed satisfaction at the results, especially in view of slowing demand for defense products in key world markets as governments restructure their defense budgets in the aftermath of the 2008 economic crisis. These changes began in 2009 and were felt at Rafael during 2010 in the form of a 3% drop in its orders backlog from NIS 13 billion at the end of 2009 to NIS 12.6 billion a year later.
Rafael CFO David Vaish told "Globes", "We're still talking about a very handsome orders backlog, which amounts to almost two years of sales, and is definitely not a crisis. This is still a respectable and strong variable for a company that only ten years ago was only a loss-making unit of the Ministry of Defense, but is now making very handsome profits by any measure."
Rafael believes, on the basis of market assessments and the range of products developed, that its orders backlog will grow this year. These products include its innovative and groundbreaking Trophy missile defense system for tanks and armored personnel carriers, which the IDF recently brought into service and which has proven itself in operations.
Rafael says that since reports of the System's operational success in Gaza, foreign armies have contacted the company to test the system.
Rafael has also developed the Iron Dome anti-missile defense system against short-range rockets, which is due to soon become operational with the Israel Air Force.
Published by Globes [online], Israel business news - www.globes-online.com - on March 23, 2011
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