Defence firm Saab raises sales outlook after Q1 profit jump
2:54 am Friday, April 26th, 2024
By Johan Ahlander
STOCKHOLM (Reuters) -Swedish defence equipment maker Saab reported on Friday a 28% rise in first-quarter operating profit and raised its organic sales growth forecast on the back of strong demand amid Sweden’s NATO accession.
Operating profit at the maker of the Gripen fighter jet was 1.19 billion crowns ($109 million), compared with 928 million a year earlier.
“We are doing very well in the market,” CEO Micael Johansson told Reuters. “We have a strong order intake, a lot of medium and small orders that are increasing, which is great as a basis for the company.”
Saab raised its organic sales growth forecast for 2024 to 15-20% from 12-16% previously.
The company, which competes with U.S. defence giant Lockheed Martin, France’s Dassault and Britain’s BAE Systems, has seen strong demand for its products over the past year due to geopolitical turmoil and Sweden’s accession to NATO.
Johansson said Sweden’s membership meant that the company now was able to participate in the alliance’s tender processes.
“We have received at least three orders for support weapons and Robot-70s from that body. We had difficulty accessing that when we were not members,” he said.
Saab’s support weapons include man-portable anti-tank weapons, while Robot-70 is an air defence system.
Order bookings increased to 18.5 billion crowns in the quarter from 17.0 billion last year. Its order backlog increased to 158 billion crowns from 133 billion.
Saab is in the process of ramping up production to cope with the demand and backlog. It recruited nearly 2,500 employees and increased capital expenditure by more than 50% in 2023, and added another 725 people in the first quarter of this year.
($1 = 10.8794 Swedish crowns)
(Reporting by Johan Ahlander, editing by Anna Ringstrom)
