IAI's revenue growth in the first half was reflected in its gross and
operating profits. The company posted a gross profit margin of 13.4%
of sales in the first half, compared with 12% in the first half of
last year. Its operating profit was $58 million, 107% more than in
the corresponding period of last year, and its operating profit
margin rose to 4.4% from 2.5%.
Despite the improvement, the company's profit margins were
significantly lower than the industry norm. For example, Elbit
Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) posted gross profit margins
double those of IAI's and, at 6-7% its operating profit margins were
also significantly higher than IAI's.
IAI posted a net profit of $48 million in the first half, after
allocated $26 million for early retirement for 150 employees,
compared with $25 million in the corresponding period of last year.
On the other hand, IAI made a financing profit of $16 million in the
first half, mostly from financing profit from the company's cash and
from $5.7 million in securities.
One of the more significant figures in a financial report of a
company like IAI is the orders backlog. IAI had an orders backlog of
$7 billion at the end of June, up from $6.2 billion at the end of
2005.
Israel Aircraft Industries Ltd. (IAI) published its financial report
for the first time in its history. The publication is part of the
company's preparations for a bond offering of $100-250 million
scheduled for early 2007. IAI intends to use proceeds from the issue
to make acquisitions and finance the early retirement of employees.
IAI posted $1.3 billion in sales in the first half of 2006, 18% more
than in the first half of 2005. Second quarter sales totaled $713
million, 31% more than for the corresponding quarter of last year.
Military sales, mostly to the domestic and Asian markets, accounted
for 64% of total sales, after 15.8% growth compared with the
corresponding period of last year. Civilian sales, mostly in the US
market, accounted for 36% of total sales.