Interim Report for January - June 2009
• New orders and order stock increased compared to last year.
• Net sales were EUR 250.4 million (EUR 288.4 million).
• Income before taxes was EUR 12.0 million (EUR 16.3 million).
• Full year outlook has remained mainly unchanged.
Key figures
New orders received during the review period clearly exceeded those received during the corresponding period last year. Defence material and defence related maintenance accounted for 93% (79%) and civilian products for 7% (21%) of the new orders.
Patria AMV vehicles were chosen by the Swedish FMV to Sweden and an extension to the Patria AMV vehicles deal in Croatia was signed. Furthermore, the United Arab Emirates confirmed the decision to equip some of their patrol boats with Patria Nemo mortar systems. The agreement for the delivery of Patria AMV vehicles to Sweden, worth approximately EUR 240 million, is, however, still subject to, among other things, the final approval of the Swedish government.
Patria signed an agreement related to the Finnish Defence Forces’ medium range air defence missile system project. The first serial production Hawk aircraft that was upgraded to glass-cockpit level was delivered to the Finnish Air Force in June.
The consolidated net sales and profitability were lower compared to last year, which was mainly due to the maturity structure of major delivery projects and delays in certain delivery projects of the Land & Armament Business Unit. The deliveries of Patria AMV vehicles to the Slovenian Ministry of Defence started in June.
Defence material and defence related maintenance accounted for 86% (87%) and civilian products for 14% (13%) of the net sales. Sales outside Finland accounted for 61% (54%) of the Group’s net sales.
The markets for Patria’s products and services have so far during the year been relatively stable, especially given the general effects of the financial crisis on many other sectors. It is believed, however, that public spending on defence materiel will be reduced as a consequence of the weak economic situation on several important markets for Patria in the coming years.
Millog Oy started the overhaul and maintenance of the Finnish Army’s material and the operations have run well and according to the plan. Close to 500 persons were transferred from the Finnish Army to Millog Oy in the beginning of this year. The groundbreaking concept of outsourcing depot-level maintenance has proven to be quite promising.
Nammo Group continued its strong performance during the first six months of the year. Nammo has since 2006 been consolidated by using the proportionate method line by line i.e. Patria’s consolidated financial statements include an amount of Nammo’s assets, liabilities, revenue and expenses corresponding to Patria’s 50 % holding in Nammo.
In May 2008 the National Bureau of Investigation of Finland announced its pre-trial investigations concerning former Patria Vehicles Oy’s vehicle deal in Slovenia (2006) and former Patria Vammas Oy’s (later Patria Weapon Systems Oy) howitzer deal in Egypt (1999) due to suspected bribery and other malpractices. At the end of the review period, the pre-investigation report in the Egyptian case was submitted to the relevant parties for final comments and the other pre-trial investigation still continues.
The net sales in 2009 are estimated to increase compared to 2008, mainly due to Millog Oy having started its operations in the beginning of 2009, and the operating profit excluding non-recurring items is expected to remain on last years level. There are, however, risks in certain delivery projects, which, if materialising, may have an adverse impact on the Group’s net sales and profitability.
This review has not been audited.
Contact persons:
Mr Heikki Allonen
President and CEO
Mobile: +358 40 869 2040
Mr Kai Nurmio
Executive Vice President, CFO
Mobile: +358 40 869 2020
Patria is a defence and aerospace group with international operations delivering its customers competitive solutions based on own specialist know-how and partnerships. Patria is owned by the State of Finland and the European Aeronautic Defence and Space Company EADS N.V.
