Israel Aerospace Industries (IAI) posted a $32 million net profit in the third quarter of 2019, which compares with a $12 million net loss in the corresponding quarter last year, according to the company's third quarter reports, published today. IAI's operating profit totaled $42 million in the third quarter, which compares with a $19 million operating loss in the third quarter of 2018. Sales exceeded $1 billion in the quarter, almost 17% more than in the corresponding quarter in 2018.
IAI reported that its growth in sales extended to all its divisions, and that its orders backlog amounted to $13.3 billion. The company's cash totaled $1 billion at the end of the quarter, but its cash flow was minus $245 million, attributable to a delay in payment from an important customer. IAI said that this delay would not jeopardize its ability to meet future obligations. IAI did not specify who this customer was, but defense market sources said that it was Israel's own Ministry of Defense, and that the delay was caused by the political situation, which is making formation of a new government difficult, resulting in the absence of a budget. In recent months, this situation has also caused the Ministry of Defense to accumulate debts to other defense companies, including Elbit Systems.
Against a backdrop of striking improvement in IAI's financial results over the past three quarters, IAI CEO Brig. Gen. (res.) Nimrod Sheffer said today, "The results in the quarter continue the upward trend in the company's performance, and I regard this as a result of the implementation of our new strategy, which focuses on entering new markets, improving the operating model, and concentrating on growth engines."
In recent months, IAI and the Government Companies Authority have been speeding up preparations for an offering of 25% of IAI's shares to the public on the Tel Aviv Stock Exchange. At the same time, the political situation has made a delay in the offering likely, given the harsh disputes with the company's workers' committee, which opposes the offering in its current format.
Published by Globes, Israel business news - en.globes.co.il - on November 28, 2019
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