A $1.6 billion arms order from Azerbaijan, as reported by the foreign media earlier this year, boosted Israel Aerospace Industries Ltd's (IAI) (TASE: ARSP.B1) backlog to $9.7 billion. IAI's net profit rose 16% to $54 million for the first quarter from $46 million for the corresponding quarter of 2011, and revenue rose 4.3% to $894 million from $855 million.
IAI said that its sales rose despite the continuing slowdown in the civilian aviation market, especially the lower demand for executive jets. Engine maintenance for executive jets as well as plane conversions were also down.
80% of IAI's sales in the first quarter were exports, and 76% were defense sales.
Gross profit rose 26% to $138 million for the first quarter from $113 million for corresponding quarter, partly due to the weaker shekel compared with the corresponding quarter.
IAI chairman Dov Baharav told the board that the company's achievements came despite weakness in Western military and civilian markets and despite, "major internal constraints, such as the restrictions of a government company and the lack of managerial flexibility. These achievements demonstrate the company's strength."
IAI CEO Yitzhak Nissan is due to leave at the end of the year, after his deep involvement in the recent huge contract. He said that the strong growth in the company's orders backlog ensures profitable business in the coming period.
Published by Globes [online], Israel business news - www.globes-online.com - on May 30, 2012
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