Saab expects strong 2023 as war fuels equipment demand
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SWEDISH defence-equipment maker Saab on Friday (Feb 10) reported a rise in fourth-quarter operating profit as order bookings doubled, and forecast a strong 2023, sending its shares to a record high.
The war in Ukraine has raised geopolitical tensions across Europe, leading many nations to ramp up military spending, and creating opportunities for Saab to land major contracts.
In the fourth quarter ending on Dec 31, order intake for the company, which focuses on areas such as aeronautics and advanced weaponry, was 29.9 billion Swedish kronor (S$3.8 billion), compared with 12.2 billion kronor a year earlier, it said.
Saab shares had surged almost 10 per cent by 0835 GMT.
The order backlog increased to 128 billion kronor, compared with 105 billion kronor the year before, Saab said. The company expects organic sales growth of 15 per cent in 2023, with operating profit rising faster than revenue this year.
During the quarter, Saab had signed a contract to deliver a system to train naval crews in anti-submarine warfare in Poland, and a £229-million (S$367.6-million) anti-tank weapons order from Britain, the company said.
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Saab has also raised its own spending, investing to scale up output through plans including setting up a production facility in India.
Chief executive officer Micael Johansson said that Saab could invest in countries such as the United States, and in new production lines for components such as sensors. “We do invest quite heavily now,” he said.
Ukraine is pushing for the supply of fighter aircraft, including Saab’s Gripen, a move that has so far been resisted by the West. Any decision rests with the Swedish government, which has said that it is not currently on the agenda.
While stressing that it would be a political decision, Johansson said that he agreed with assessments that Gripen could be a suitable option for Ukraine. “It’s easy to operate, easy to train on, easy to fly and use,” he said. But “we don’t really have any initiatives rolling in that direction right now”.
Operating profit for the group was 1.3 billion kronor in the October-to-December quarter, compared with 1.1 billion kronor a year earlier. “Overall, a strong full-year performance, with impressive order intake and eye-catching sales guidance,” noted analysts at Citi. REUTERS
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