Patria Group Interim Report for January - June 2011
Patria Group Interim Report for January–June 2011
Strong order stock increases Patria’s net sales for 2011. Major new orders received by Patria during the financial year 2010 form a solid order stock, which will raise the company’s net sales compared to the previous year.
For the first six months of the year, net sales totalled EUR 283.6 million, at EUR 268.5 million last year (+5.6%). Similarly, operating profit rose to EUR 17.0 million, from EUR 3.1 million a year earlier. This profit improvement was due, for instance, to the gradual revival of vehicle and composite businesses, the positive development of Millog Oy and the Rauma-class fast attack craft upgrade’s progress as planned.
Patria’s equity ratio stood at 42.0%, at the previous year’s level. Gearing, however, improved and showed 7%, having been 43% a year earlier. In the beginning of 2011, Patria and Åkers Krutbruk concluded an agreement on the protection solutions for Patria AMV armoured vehicles to be delivered to Swedish Defence Materiel Administration (FMV). Patria will supply 113 Patria AMV vehicles to the Swedish Armed Forces; the agreement also includes the option to purchase a further 113 vehicles. The delivery of the AMV vehicles will begin during 2012 and they will be taken into use in 2014.
In February, Al Taif Technical Services and Patria signed a Memorandum of Understanding. The objective is to serve Al Taif’s customer, the UAE Armed Forces General Headquarters, and to promote and assist in the growth of the technical support services of both companies. In March, Patria strengthened its position in Norway and in Nordic helicopter maintenance by buying NAC Maintenance AS, a Norwegian company based in Bardufoss and specialising in helicopter and aircraft maintenance. Patria aims to expand helicopter maintenance operations and serve military and civilian operators, especially in northern Norway. In Utti, Finland, a new helicopter maintenance hangar was inaugurated in March. At the beginning of May, a two-seater Hawk Mk66 aircraft upgraded by Patria made a successful maiden flight. In 2007, the Finnish Air Force purchased 18 pre-owned Hawk Mk66s from Switzerland. These supplemented the Hawk Mk 51/51A fleet purchased earlier. In 2009, this was followed up by an order placed with Patria, for an extensive cockpit and avionics upgrade of the aircraft. All 18 fast-jet training aircraft will be upgraded by 2013. The programme will have an employment effect on Patria of approximately 140 person-years. By the end of the review period, the Finnish Defence Forces had received a total of ten NH-90 helicopters assembled by Patria. The company is also assembling these for Sweden.
Patria Pilot Training, a provider of ATPL(A) training, upgraded its fleet during the spring. The school operating at Malmi, Helsinki, now has nine new Tecnam P2002 JF aircraft designed for basic flight-training and three Cirrus SR22 avionics training aircraft acquired a year ago. Thus, the school boasts the most modern aircraft fleet in Europe. Among others, the fleet was used by the approximately 30 Russian pilot trainees of the Saint-Petersburg State University for Civil Aviation at the beginning of June. Their training is a continuation of collaboration initiated in 2009 with the same university.
In June, the Pirkanmaa District Court decided to dismiss the bribery charges pressed against the company with respect to Patria’s Egyptian export project. By contrast, four former or present Patria employees were sentenced to conditional imprisonment related to an accounting offence, aggravated accounting offence or aiding or abetting therein. After the end of the review period, all parties have declared their intention to appeal, which means that the proceedings will continue.
During the review period, Patria and the Finnish Military Sport Federation launched a three-year ‘Get Moving’ project. This project aims to promote a sports-oriented lifestyle and improve young people's quality of life. The project will have important social consequences, reaching all young people entering military service in order to inspire them to exercise and maintain a healthy lifestyle. Outlook for the rest of the year During the second half of the year, net sales are expected to show faster growth than during the first half and operating profit is forecast to improve year-on-year, based on solid order stock, for example. However, budget cuts both in the Finnish and global defence industry and legislative amendments on defence-related acquisitions will intensify competition for new projects in the long term. The Slovenian vehicle project still involves risks that, should they be actualised, could have a major negative effect on the Group’s profitability.
For further details, please contact: Birgitta Selonen, Vice President, Corporate Communications, tel. +358 40 869 2043, [email protected]
Patria is a globally operating defence, security, and aviation group providing customers with competitive solutions based on strong expertise and collaboration with trusted partners. Patria is owned by the State of Finland and the European Aeronautic Defence and Space Company (EADS N.V.). www.patria.fi
