Israel Aircraft Industries generated $3.3 billion in sales in 2007, an increase of 18 percent from a year earlier, IAI said Thursday. "IAI's profitability in 2007 is higher than in 2006, despite the sharp revaluation in exchange rates," said Menashe Sagiv, IAI's corporate vice president for finance. "Most of the company's revenue is in US dollars, yet more than 50 percent of our expenditures are in shekels. Appreciation of 9% increases our shekel expenses in terms of US dollars. This affects the financial results, primarily in the revaluation of surplus shekel liabilities." IAI had $3.3b. in sales last year, including $2.7b. in exports, or 82% of sales, compared to $2.8b. in 2006. The company's net profit was $127 million in 2007, down 3% from the previous year when it was $130m. Operating profit grew 46% to $183m., up from $125m. in 2006. IAI's backlog of orders reached a record high of $7.7b. (83% for export) at the end of 2007. Sales in the last quarter of 2007 grew by 13% to $916m., compared to $813m. in the same quarter of 2006. "We have adopted an aggressive marketing policy in all our markets, which has borne fruit in the form of $4b. in new contracts," IAI president and CEO Yitzhak Nissan said. "The contracts with overseas customers contribute directly to the strength of the Israeli economy by generating orders from other Israeli companies." IAI has been streamlining its business and targeting expansion overseas over the past two years. About 18 months ago, IAI set up Stark Aerospace in the US, which produces unmanned aerial vehicles (UAVs) and stabilization and vision systems. Last month, IAI and Indian conglomerate Tata formed a joint venture in India for the development and manufacture of defense products. "2007 demonstrated impressive technological accomplishments, including the launch of the Arrow missile and the Ofek 7 and Tecsar satellites," Nissan said. "IAI continues to invest in developing world-class systems that will result in new market penetration in the coming years. We continue to focus on international cooperation and increased presence in the world markets."