Rafael's Financial Results 2011

Rafael completes 2011 with a net profit of $111 million

21 March 2012 | Source: RAFAEL

http://www.rafael.co.il/Marketing/192-1848-en/Marketing.aspx

Rafael Advanced Defense Systems Ltd. ended the year 2011 with a net profit of $111 million (397 million Shekels), with orders totaling $1.9 billion (7 billion Shekels), an order backlog of $3.5 billion (13,241 billion Shekels) and sales of $1.9 billion (7 billion Shekels).

Rafael announces today, March 21, 2012, its financial results for the year 2011:

Breakdown	2011 Results	2010 Results
Net Profits after taxes	$111M (397M Shekels)	$170M (633M Shekels)
Sales	$1,979M (7,080M Shekels)	$1,851M (6,911M Shekels)
Orders	$1,945M (6,960M Shekels)	$1,897M (7,081M Shekels)
Order Backlog	$3,465M (13,241M Shekels)	$3,568M (12,661M Shekels)

Rafael develops and manufactures advanced defense systems for the IDF and the defense establishment, such as the "Iron Dome" and "TROPHY" (an active defense system currently mounted on Merkava-4 MBT's), both of which became battle-proven in 2011, while continuing to expand its export activity to international markets.

The company offers its customers a diversified array of innovative solutions at the leading edge of global technology, from underwater systems through naval, ground, and air superiority systems to space systems.

Rafael is the largest employer in Northern Israel with approximately 6,500 employees and numerous subcontractor and service suppliers.

As noted, in 2011 Rafael posted a profit in the amount of $111 million (%5.6 of sales), compared to $170 million in 2010 (mainly from exceptional financing revenues, and the sale of its subsidiary Medingo, which significantly contributed to Rafael's profits).

Rafael's profits in 2011 were achieved for the most part from its production, R&D, and marketing in the following fields: air defense and superiority, defense systems for MBT's and armor vehicles, air-to-ground missiles, electro-optical-tactical precision missile systems, navigating, targeting and tactical reconnaissance pods, various types of armor and protection systems, remote-controlled weapon stations, breaching munitions, space propulsion, and more.

Rafael's sales of defense systems were notable in a number of areas, including air defense, air-to-surface, electro-optical-tactical precision missile systems, navigating, targeting and tactical reconnaissance pods, various types of armor and protection systems, remote-controlled weapon stations, breaching munitions, space propulsion, and more.

Rafael's order backlog in 2011 was $3,465 billion, comprising 1.8 years of sales activity, of which 70% is intended for export to many countries in Europe, Latin America, the U.S. and the Far East.

In addition, the year 2011 was characterized by Rafael’s continued investment in R&D (8% of its sales), in the professional development of its employees, the evaluation of new civilian investment opportunities such as renewable energy, complemented by its supportive role and significant contribution to academic institutions.

In the past year Rafael completed the acquisition of 50% of the shares of CONTROP, which develops and produces sophisticated electro-optical observation and security systems.

Rafael recently completed a capital-raising round after issuing 450 million shekels in bonds through expansion of its existing series to institutional clients, based on Rafael's AAA rating, according to Midroog, a credit rating company and subsidiary of Moody's.

VADM (Ret.) Yedidia Yaari, President and CEO of Rafael, said that 2011 was a successful year for Rafael, allowing it to continue to provide integrative solutions to Israel's security establishment and to its customers around the world – partly a result of Rafael's ground-breaking R&D programs and sound marketing activities.

Yaari stressed that the economic changes and uncertainties in Israel economy, coupled with concern about a slow-down in orders from Israel's MoD and from other countries around the world are responsible for the decrease in the company's order backlog. "These events will force us to take new measures that will allow us to maintain our business robustness on the one hand, and carry on with our marketing activities, especially overseas, on the other hand."

Yaari thanked Rafael's employees whose hard work and exceptional abilities allow Rafael to deliver the most advanced technologies to customers around the world and locally, technologies that are an integral part of Israel's defensive and battle-winning capabilities.

Major General (Ret.) Ilan Biran, Chairman of the Board at Rafael, said that Rafael continues to be a main pillar in Israel's security, by providing its defense establishment with unique capabilities such as Iron Dome and TROPHY, as well as an array of other products and technologies.

"Rafael's ability to balance between its mission as a national laboratory with international and its marketing activities is an essential component in our continued efforts to nurture our next generation of scientists and managers, alongside our development of cutting-edge technologies. It is this excellence that enables us to increase our financial resources from international activities and invest in the R&D of future systems that are part of the realization of Rafael's vision and the reinforcement of Israel's deterrence", said Biran.

Biran added that the global economic situation, which brought about a decrease in order backlog, combined with cuts in Israel's defense expenditure, have forced Rafael to take measures that will enable the company to grow and remain resilient, in light of the global slowdown and recession.

With the receipt of the 2011 financial results, the Chairman of the Board conveyed his thanks to the CEO and to the company’s management and employees for their invaluable contribution to Rafael’s international business foundation and to Israel’s security.