Rafael reports higher profit for 2016

Iron Dome

The Israeli defense company's orders backlog totaled NIS 21.7 billion.

Today, a few days after a report by the Ministry of Finance Budget Department cited Rafael Advanced Defense Systems Ltd. senior executives as having the highest salaries in government defense companies, Rafael published its financial results for 2016. The company reported a NIS 473 million net profit, up 3%, compared with NIS 459 million in 2015.

New orders in 2016 totaled NIS 10.7 billion, and sales amounted to NIS 8.32 billion, 6% more than in 2015. The company's orders backlog as of the end of 2016 was NIS 21.72 billion, 12% more than at the end of 2015.

Rafael attributed its 2016 results to a series of measures taken by the company, especially its focus on production, development and marketing of systems providing a solution for a range of threats from the air, outer space, sea, and land. The company also continued to upgrade the Iron Dome missile interception system, completed testing for its new David's Sling interception system, developed innovative drone neutralization capabilities, etc.

Rafael also expanded production of its Trophy active defense systems for protecting tanks and armored fighting vehicles (AFVs) against anti-tank missiles, following the IDF's decision to equip all of its new Merkava tanks and Namer AFVs with this system. Rafael signed a substantial deal to supply the Lithuanian army with remote controlled weapons positions.

Upon the publication of the company's performance, Rafael CEO Major General (res.) Yoav Har-Even said, "During 2016, we completed a deep and comprehensive strategic process in which we examined and updated our vision and Rafael's goals for the coming decade in order to continue our leadership in the development of advanced solutions in the forefront of technology in Israel and worldwide."

"Management is dragging its feet"

The Rafael board of directors met last Thursday and approved the appointment of former Minister and MK Uzi Landau as Rafael chairman. Landau is due to officially take up his position in a few days, replacing Brigadier General (res.) Yitzhak Gat.

Minister of Defense and Yisrael Beitenu chairman Avigdor Liberman pushed for the appointment of Landau, who represented Yisrael Beitenu in the cabinet and the government.

The Ministry of Finance Budget Department's report published last week showed that the cost of Gat's salary was over NIS 125,000 a month. The cost of then-Rafael CEO Gen. (res.) Yedidia Yaari's salary was NIS 120,000 a month. They had the highest salaries in the government defense companies.

While Rafael's management expressed satisfaction with the company's performance, the company's 1,500 engineering technicians (out of 7,500 total company employees) are still in the midst of a struggle to improve their labor conditions. The engineering technicians claim that Rafael's management is not negotiating with them for a new collective work agreement to arrange the workers' employment terms and improve their salaries, which have eroded over the years.

In recent weeks, the engineering technicians have staged a series of protests against management, including shutting down the company's trials of new and existing weapons systems, and have occupied one of the company's main activity centers at Machon David in the north.

Published by Globes [online], Israel Business News - www.globes-online.com - on March 20, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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