Israel Aerospace Industries (IAI) publishes its financial statements for 2014. The Company presents record sales and an increase in gross profit juxtaposed by the deterioration of Bedek Aviation Group’s activities and by the conversion of passenger aircraft to cargo configurations.
• Record sales of $3.83 billion in 2014, representing an increase of 5% compared to 2013
• 9% increase in gross profit compared to 2013 to $571 million and a 68% increase in operating income to $141 million
• Decrease in net income: $27 million compared to $75 million in 2013. The increase in all the profit parameters was offset by non-cash deferred tax expenses due to the increase in the U.S. dollar exchange rate
• Order backlog of $9.1 billion, representing about 2.3 years of operation
• Negative cash flows from operating activities in 2014 totaling $193 million compared to positive cash flows of $550 million last year, mainly due to the deferral of a major engagement
Rafi Maor, Chairman of the Board says, “IAI is concluding 2014 with record sales of nearly $4 billion to the defense and commercial markets, despite the significant decrease in net income, which mainly results from recording deferred tax expenses due to the increase in the U.S. dollar exchange rate”.
IAI see also deterioration in the business results of the aircraft conversion and maintenance activities in the Bedek Aviation Group.
“IAI is required to respond to the continuing deterioration in the aircraft conversion and maintenance segment.”, says Joseph Weiss, President & CEO, “The business results in this field reinforce the urgent need to take actions to redirect the Bedek Aviation Group towards growth and profitability.
“The Company has also taken steps in identifying and focusing on several major growth engines for the coming years. For example, the area of unmanned air systems continues to represent a central growth engine and this year we have also entered new and innovative areas in this segment. The air defense and mission aircraft fields have reached major achievements in 2014 which cannot be elaborated upon for security reasons. We estimate that these fields will continue to represent a significant growth engine at the technological front.
IAI invests resources and focuses on the conversion of defense technologies to commercial markets in order to leverage the knowhow and accomplishments in the defense market. A noticeable example of this is the groundbreaking and innovative robotic TaxiBot aircraft tractor which is raising a great deal of interest among global investors and aviation companies.
IAI also sees a great deal of potential in its cyber activities that are designed for both the defense and the commercial markets. This year, the Company has conducted major transactions in its target markets based on its innovative and idiosyncratic capabilities in the cyber field.
The Company announce its continuing to examine the different issues involving the preparations for an IPO of minority shares.