The war in Ukraine is already in its fifth year; Israel has been through two rounds of fighting with Iran within a year, and China continues to put pressure on the countries around it.
The result: another record quarter for Elbit Systems.
The manufacturer of Hermes drones, munitions, and intelligence systems reported a 16% increase in sales in the second quarter of the year to $2.3 billion, putting it on track for annual sales of $9 billion. Net profit rose even more sharply, jumping 40% to $173.6 million.
The company's order backlog reached an all-time high of $32 billion, compared with $23.8 billion a year earlier, a 33% increase.
Sales to the Defense Ministry continued to grow in the latest quarter, reaching 37% of the company's activity, driven by munitions, drones, and intelligence systems.
Increased sales of radio and command-and-control systems in Europe drive profits
Sales of C4I and cyber systems rose by about 11%, mainly due to increased sales of radio and command-and-control systems in Europe. Intelligence and electronic warfare sales increased by about 22%, primarily due to higher sales of land- and airborne high-power laser systems, electronic warfare systems, and naval systems in the Asia-Pacific region.
Land systems sales rose by about 32%, thanks to sales of munitions and ammunition in Israel. Drone sales, by contrast, fell by about 8%, mainly due to an unfavorable one-time project mix and a decline in sales of training systems and simulators in Europe, which was partly offset by increased sales of unmanned aerial vehicles in Israel.
Earnings per share stood at $3.61, compared with $2.69 in the corresponding quarter last year.
"Most of the new orders are from abroad, which indicates the demand and interest in our products. We presented the airborne laser for fighter jets and combat helicopters, which will help, among other things, deal with swarm attacks by UAVs and drones, and there is great interest in them,” Bezhalel "Butzi" Machlis, president and CEO of Elbit Systems, told Walla.
“At the same time, we are continuing to increase deliveries of the high-power laser to the Defense Ministry and Rafael. Hundreds of our engineers are employed on this."
Elbit container reportedly held up at a port due to boycotting
When questioned about a recent report indicating an Elbit container had been held up at a port as part of a boycott of Israel, Machlis said the incident was being investigated.
“Containers are sometimes delayed for all kinds of reasons. We have no problems in the supply chain. Since the days of the coronavirus pandemic, we have invested in building up inventories of raw materials and diversifying suppliers."
Machlis also noted that the Defense Ministry has yet to settle its debt with the company.
“Fortunately, Elbit is a strong company and benefits from payments from abroad that allow us to continue supplying the IDF and move up delivery schedules. I am confident that the debt will be paid, and we are in dialogue with the Defense and Finance ministries about it," he said.