Israel Aerospace Industries' financial figures for third quarter 2012

Israel Aerospace Industries (IAI) reported sales for Q3 2012 of $751m compared to $817m in Q3 2011. Export sales represent 76% of total sales and reached $568m. Sales to the military sector represent 72% of total sales and reached $540m. The decrease in sales is attributed to a reduction in the scope of activity mainly in the civil aviation sector, in the field of engine maintenance and aircraft conversion as well as to delays in development projects in the military divisions, which resulted in the deferment of recognition of revenue. Gross profit for Q3 2012 reached $112m (14.9% of sales), compared to $149m (18.2% of sales) for Q3 2011, a reduction of 25%. The decrease in gross profit is attributed to the decline in activities in the field of aircraft conversion and partly to one-off losses in production of assemblies of $18m, and in the field of business jets of $13m. Net profit Q3 2012 reached $14m, compared to net profit of $3m for Q3 2011. Backlog of $ 9bn represents over two and a half years of activity. 86% of the backlog is intended for sale to overseas customers. The backlog consists of a range of products over a wide geographical spread. Negative Cash flow from current activities reached $285m compared to a negative cash flow from current activities of $72m for Q3 2011. The major cause for the fall in cash flow is increase in work in progress.