Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) reported a 33% fall in profit for the second quarter despite higher revenue.
IAI's revenue in the second quarter of 2014 was $939 million, up 5% from $896 million in the corresponding quarter of 2013. Exports accounted for 78% of sales, similar to the second quarter of 2013.
The company's net profit in the second quarter of 2014 was $12 million (1.3% of sales) down 33% from $18 million (2% of sales) in the corresponding quarter of 2013.
At the end of the current quarter, IAI's order backlog totaled $9.7 billion (of which $1.8 billion is for sale in 2014) compared with $10 billion at the end of 2013, a decrease of 3%. The order backlog represents about 2.6 years of work and about 83% of the order backlog is for foreign customers.
IAI Chairman Rafi Maor said, "IAI continues to face challenging and complex markets, particularly with the continued security budget cutbacks in Israel and around the world. This, coupled with the low US dollar exchange rate, greatly affects the company, being an export-oriented with some 80% of sales made outside Israel."
Profit was partly hit by expenses for early retirement of employees. In the second quarter, 44 employees retired early from the company at a cost of $8 million. The employees' early retirement is part of IAI's ongoing streamlining plan and is financed using its independent resources.
Published by Globes [online], Israel business news - www.globes-online.com - on August 12, 2014
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