Updates with details, CEO comments, share reaction
By Steven Scheer
JERUSALEM, Aug 14 (Reuters) - Defence firm Elbit Systems ESLT.TA, ESLT.O reported higher second-quarter profit on Wednesday, continuing to benefit from supplying Israel in its war against Hamas militants in Gaza and strong demand more generally.
One of Israel's largest defence contractors, Elbit earned $2.08 per diluted share excluding one-time items in the quarter, versus $1.65 a year earlier.
Revenue rose to $1.63 billion from $1.45 billion. Some 27% of quarterly sales came from Israel, against 17% last year. At 29%, Europe was Elbit's largest customer, with North America steady at 23% but Asia-Pacific slipping to 15%.
"We see many more opportunities for us in the global market, just in Israel," CEO Bezhalel Machlis told Reuters, adding that given its pipeline "it's quite obvious the company will continue to grow quite rapidly in the coming years."
"Unfortunately, globally there are many conflicts right , and these conflicts drive high investment in defence ... Our portfolio is very wide and we can take advantage of this."
Machlis said an order backlog of $21.1 billion meant Elbit was likely to reach $7 billion in revenue in 2025 rather than in 2026 as initially thought.
"What really limits us is our operational capacity," he said.
To that end, Elbit plans to open a munitions facility in southern Israel with robots and automation that Machlis said should "drastically" boost production and revenue, as well as another plant to produce unmanned aerial vehicles (UAVs).
Elbit has some 40 subsidiaries around the world, including in the United States, Britain and Germany, that have helped with production. "Quite soon, we will be able to meet all the demand that we see ahead of us," Machlis said.
Revenue over the first half of 2024 hit $3.2 billion.
Machlis said that since the Gaza war erupted on Oct. 7, Elbit had brought out a host of technologies for the Israeli military.
"The portfolio was improved drastically and this war has been an accelerator for many developments. The IDF (Israel Defense Forces) is using these technologies and in the future, we will bring them to the rest of the market as well," he said.
These include UAVs, communication systems and AI capabilities.
Elbit's Nasdaq listed shares were up 4.6% at $198.67 in early trading, but down 11% this year, partly pressured by divestments by some investors, including Scotiabank's 1832 Asset Management, a unit of Canada's Bank of Nova Scotia BNS.TO.
Elbit declared a second-quarter dividend of $0.50 per share, the same as in the first quarter.
(Reporting by Steven Scheer; Editing by Bernadette Baum and Mark Potter)
((steven.scheer@thomsonreuters.com; +972 2 632 2210; Reuters Messaging: Twitter: @StevenMScheer))