By Arie Egozi
Israel aerospace industries (IAI) will try to accelerate its restructuring program to achieve greater profits, in order to prepare for possible partial privatization. This according to company sources.
On May 30, IAI published its financial statements for the first quarter of 2019. According to the report, the net profit was only US$14 million out of sales of US$1 billion.
Although sales in the first quarter increased by 13.5 per cent compared to the first quarter of 2018, there was no change in the company’s net profit compared to the corresponding period last year.
In the first quarter IAI signed new contract values at US$200 million, which brought the company’s backlog to US$13.7 billion. 79 per cent of the backlog is from contracts with foreign customers.
Company sources said on May 30 that the small profit is a “repeated problem”, that stems from some major problems, mainly the need to streamline some activities and send home redundant employees.
The sources added that a partial privatization is “a must” in order to increase profitability and get the tools to compete with Elbit systems, IAI main competitor. This competition increased since Elbit acquired Israel military industries (IMI) In comparison – Elbit systems ‘ sales in the first quarter of 2019 totaled US$1.1 billion and the net profit was US$50 million.