Bet Shemesh Engines Ltd. (TASE: BSEN), controlled by First Mezzanine Investors Opportunity Funds (FIMI) with a 43% stake, today reported that it had signed an agreement to develop and manufacture a new product for advanced engines in the civilian market for German company MTU Aero Engines.
The new agreement is the third extension of a long-term framework agreement between the two companies from 2017. The new agreement is projected to add $53 million to the framework agreement, which will now amount to $130 million annually in 2018-2030.
The projected orders indicate Bet Shemesh Engines' growth potential in the coming years.
Bet Shemesh Engines works with aircraft engines in two different sectors. The first is the manufacturing of parts for jet engines, including precise casting of metal parts. The parts involved are the most complex in aircraft engines, which very few companies in the world are now able to produce.
The second is the engines sector, which includes renovating, assembling, and designing various parts for jet and other engines. The company sells to both the civilian and military markets, but most of its sales now are to the civilian market.
Bet Shemesh Engines produces parts for the world's leading engine manufacturers under framework subcontracting agreements.
Bet Shemesh Engines' share price responded to the news with a 2% rise, completing a 34% climb over the past year and pushing the company's market cap up to NIS 720 million.
Bet Shemesh Engines finished the first quarter of 2018 with $24.8 million in revenue, 27% more than in the first quarter of 2017. Following adjustments between sectors, its operating profit was $2.8 million, 51% more than in the corresponding quarter last year. Net profit was up 13% to $2.1 million, including $346,000 in tax expenses, compared with $131,000 in tax revenue in the first quarter of 2017, which increased the company's net profit in that period.
Bet Shemesh Engines CEO Ram Drori said today, "As we have said in the past, MTU is a leading strategic customer in the global aviation market and we are proud that the company selected Bet Shemesh Engines to develop and produce the new part, thereby again expanding the framework agreement with Bet Shemesh Engines. Our strategic customers are expressing confidence in the company's capabilities and professionalism, which creates fruitful ground for additional cooperation in the future."
Published by Globes [online], Israel business news - www.globes-online.com - on July 23, 2018
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