Subscribe to get updates
by email, IM and more!

Follow Defense-Update on Twitter
News | Photos | Events

Featured Topics:

  • Main
  • Channel
  • R&D
  • Companies
  • Products

Milipol 2009
Milipol 2009 Special Preview:
Prowlers in Cyberspace

Israel - First in line for the F-35A

Ospreys Join the Fight
Supporting Marines in Afghanistan

Proposals are in for FRES-SV



Channels: Air Combat | Air & Missile Defense | Armor & Survivability | Defense Electronics & C4ISR | Electro-Optics & Night Vision | Fire Support | Future Combat Systems | Homeland Security | Infantry & Special Operations | Logistics & Support | Missiles & Precision Strike | Naval Warfare | Training & Simulation | Unmanned Systems & Robotics | Defense Exhibitions | Search

Defense Update Business Report - 03/2010


Defense Update News Headlines:

Armored Systems Channel

C4ISR Channel

Homeland Security Channel
Aerospace | Land Systems | Missiles | Electronics | Navy | Unmanned Systems | Homeland Security | Business

Magazine / Back issues(Back)


Elbit Reports Modest Growth in Revenue, Profit and Earning for 2009

Elbit Systems has reported today the financial results of 2009, reflecting a 7.4% increase in revenues to $2.82 Billion. The growth in the Company's revenues was driven by an increase in sales in the Airborne Systems, Electro-optics and C4I Systems’ areas of operations. Earnings per share (EPS) increased by 4.6% to $5.00. By years end, the Company maintained over $5 billion in orders backlog almost unchanged from 2008. Approximately 72% of the current backlog is scheduled to be performed during 2010 and 2011.

In the past year the company increased its R&D spending to $216.8 million compared to $185.0 million in 2008. The increased spending was needed to accelerate development programs, and to sustain engineering activities in support of marketing efforts worldwide. In 2009 Elbit spent $251 million on marketing, compared to $198.3 million in 2008. The increase was mainly due to enhanced marketing efforts in existing markets, such as the United States and Brazil, as well as development of new markets in Australia and Europe.

“Over the past few years, our R&D efforts and investments were based on our analysis of the direction of the global defense industry." Joseph Ackerman, President and CEO of Elbit Systems commented, "Our read has so far proven us correct and we invested in areas which have become relevant in today’s market environment. In particular, we correctly foresaw the shift of defense budgets into unmanned vehicles and systems as well as the digitization of the battlefield, and have built up significant competitive assets in these areas. We continued to broaden our product range, our operations and customer base are becoming even more global, and we are continually enhancing our foundation as one of the leaders in the defense electronics industry. Looking ahead, we believe that Elbit Systems is well positioned strategically, operationally, and financially for the coming years.”

EADS Summ up a Tough Year - 2009 Net loss: €763 million

EADS today announced its annual results for 2009. Despite the challenging macro-economics and commercial environment the company maintained strong deliveries across all businesses, keeping revenues stable at € 42.8 billion. The company reported a net loss of €763 million for the year. One of the major causes for the loss are provisions against losses and reduced revenue from the long-delayed A400M military airlifter program. Beside the A400M debacle, strong defense and institutional business orders provided the upside for the group this year, as defense order book increased to € 57.3 billion (year-end 2008: € 54.9 billion). This growth was driven by major milestone programs including Eurofighter Tranche 3a. However, lower performance on the commercial sector decreased the total order intake by € 45.8 billion. The company's order book amounts to € 389 billion by year end. ”Beyond simply managing the economic downturn, our objective in 2009 was to keep a strong focus on innovation across our portfolio to lay the foundation for the next decade." said EADS CEO Louis Gallois.

Sweden Records 7% Increase in Arms Exports in 2009

Swedish arms exports have increased 7 percent in 2009, to a total of 13.5 billion kronor ($1.9 billion), according to the Swedish Agency for Non-Proliferation and Export Control agency (Inspektionen för strategiska produkter - ISP).

Export Targets were European Union countries, along with Switzerland and Norway, accounting for 53 percent of the sales, as well as South Africa, the United States, Canada, Australia, South Korea and Singapore, accounting for additional 27%. The remaining 20% came from other Asian countries including Pakistan, India, Malaysia, Thailand and the UAE. Minor export markets include Middle-Eastern countries such as Bahrain, Oman and Saudi-Arabia. Major weapon system platforms, like the JAS-39 Gripen to South Africa, CV-90 armored fighting vehicle to the Netherlands and Denmark, Erieye Airborne early Warning aircraft to Pakistan and NLAW anti-tank missiles to Finland and the U.K. were the leading product lines for Swedish export. The ISP is the Swedish agency responsible for military export licensing.

BAE Systems Ordered to Pay $400 Million Criminal Fine in the U.S.

U.K. based BAE Systems plc pleaded guilty today in U.S. District Court in the District of Columbia to charges of violating the U.S. Foreign Corrupt Practices Act (FCPA) compliance program, the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR). The company was sentenced to pay a $400 million criminal fine, one of the largest criminal fines in the history of the U.S. Department of Justice’s ongoing effort to combat overseas corruption in international business and enforce U.S. export control laws. The lawsuite has not involved the actions of BAE Systems Inc. subsidiaries based in the USA. (read the full story...)

BAE Systems, Northrop Grumman Team for the U.S. Army GCV

BAE Systems and Northrop Grumman Corporation have announced a teaming agreement to pursue the Ground Combat Vehicle (GCV) program. BAE Systems will serve as the prime contractor in this partnership. This is the first teaming announced for the program. The Army intends to award contracts to as many as three competitors this fall with production expected to begin in 2017. (more...)

India's 2011 Military Budget to Increase to $32 billion

India announced a four percent increase in defense spending to $32 billion in its annual fiscal year 2011. $13 billion are set for modernization projects, $12.4 billion for the army, $3.3 billion for the air force and about $2 billion for the navy. The largest weapons buyer among emerging countries, India has imported military hardware worth $28 billion dollars since 2000 mainly from Russia, Israel, France, Britain - and more recently from the USA.

L-3's Forms a New Warrior System Business Unit

L-3 Communications has entered into an agreement to acquire Insight Technology Inc., a developer of night vision and laser aiming and illumination devices.  Headquartered in Londonderry, New Hampshire, Insight employs approximately 1,100 people. The purchase price was not disclosed. Ken Solinsky, Insight’s founder and president, will become president of L-3’s newly created Warrior Systems Sector. He will report to James W. Dunn, senior vice president and president of L-3’s Sensors and Simulation Group. The Warrior Systems Sector will include Insight as well as L-3’s existing electro-optical/infrared (EO/IR) businesses currently addressing the warrior systems market and will be reported in L-3’s Electronic Systems segment. In 2007 L-3 purchased Eotech, producers of holograraphic gunsights, which is also expected to operate within the Warrior Systems Sector.

Singaporean-Israeli JV Announced

Singapore’s StartechSystems Ltd. and the Israeli company Aeronautics Defense Systems have established a joint venture positioned to tap the growing market in Asia for unmanned systems. The JV, called Startech Aeronautics Pte. will provide operations and support of unmanned systems and will also provide manufacturing facilities for systems destined for the Asian market.

France, U.K. Join Forces to Save on Fulfillment of Urgent Operational Requirements

The British and French Defense ministries have signed a Memorandum of Understanding (MoU) establishing closer co-operation on the procurement of urgent operational equipment required to support troops deployed with international coalition, primarily the operations in Afghanistan. The new agreement builds on the existing close relationship between the two countries, achieving greater savings and efficiency in the future procurement of UORs. "We often have the same urgent requirements for equipment, so it makes good sense to examine ways in which we could co-operate on procurement to mutual economic advantage." said Quentin Davies, British Minister for Defence Equipment and Support. The current agreement does not seek to deliver interoperable solutions; the aim is to share best practice and seek rapid solutions to common procurement requirements.

Urgent Operational Requirements (UOR) supplement the British MOD's long term planned equipment program procurement, to provide the fast equipment solutions that ever-changing operations demand. In recent years the U.K. has spent close to £4 billion supporting units in Iraq and Afghanistan, mostly on personal equipment and Force Protection. The French Directorate General of Armaments (DGA) has passed 36 new contracts in emergency operations in 2009, amounting to 260 million euros, with materials allocated primarily for forces in Afghanistan.

Russian Defense Exports in 2009 Amount to US$8.5 Billion

February 17, 2010: Russia sold weapons worth over $8.5 billion In 2009. Defense exports are planned to level at $9-$10 billion annually over the coming years, the country's state arms regulator Mikhail Dmitriyev said on Monday. Dmitriyev is the head of the state service that oversees military contacts. He said the country's current arms orders amount to a total of $34 billion. Russia's state arms exporter Rosobornexport accounted for including $7.4 billion of 2009 export, representing 10% increase over 2008. The agency expects sales to at least maintain the same level this year. The main export items were combat aircraft, accounting about half the annual export with air defense systems in second place, followed by naval weaponry and equipment. India, Algeria, China, Venezuela, Malaysia and Syria were the main customers in 2009 with Vietnam emerging as a key importer, buying an arms package including submarines, military aircraft and other systems.

EADS Expands Nordic Operations, Establishes a Subsidiary in Norway

February 17, 2010: EADS has established a new subsidiary and corporate office in Norway as part of the company's aim to increase its industrial presence in the Nordic region. EADS aims to expand industrial cooperation and commercial activities in Norway, considered to be a growing market for its defense and civil products. The new subsidiary, EADS Norway NUF, will be based at Aker Brygge in Oslo. Hans Lüken, Vice President and General Manager of EADS Norway NUF is heading the Norwegian operations for EADS.

Saab ans Satmel to Cooperate on a New Generation of HUD

February 17, 2010: Saab and Satmel Display Systems (SDS) have signed a Memorandum of Understanding to jointly develop, manufacture and market the RIGS Head-Up Display (HUD) in India. RIGS is a new-generation advanced lightweight HUD specifically designed for helicopters by Saab. The companies are considering there is a significant market for RIGS systems in India, both in the military and civil aviation sectors. SDS will be involved in the development of RIGS electronics and software and will also develop and manufacture parts for the HUD. The two companies have already embarked on a previous MOU, identifying SDS as an offset partner for Saab for the MMRCS program.

Sikorsky, Termna Team to Promote Danish MH-60R Prospects

In anticipation of potential order from Denmark for the MH-60R SeaHawk helicopter, Sikorsky Aircraft Corp. and Terma A/S have signed a Memorandum of Understanding to explore potential collaborations if the Danish government decides to procure Sikorsky MH-60R SeaHawk helicopters. Terma has already signed a similar MOU with Lockheed Martin, the mission system integrator of the MH-60R. In June 2009 Danish Government authorized the Ministry of defense to procure new ship-based helicopters to support Royal Danish Navy vessels operating in the North Atlantic and internationally. The Danes are evaluating alternatives to equip the Danish helicopter squadron, operating eight Super Lynx Mk.90B helicopters. The MH-60R is being offered by the U.S. government to several countries, inncluding Denmark and India, through the Foreign Military Sale (FMS) channel. 

Raytheon, Larsen & Toubro Team for Upgrade India's T-72M1 Tanks

Raytheon Company has teamed with Larsen & Toubro Limited (L&T) of India to upgrade Indian Army T-72M1 tanks. Under the proposal, Raytheon will provide infrared imaging sights and electronics to improve target accuracy and increase overall system lethality of T-72 tank battalions. The Indian company will perform the final integration of fire control system and sensors on the T-72 tanks."L&T is the only Indian company in the private sector that is leading a team for the T-72 upgrade program." said M. V. Kotwal, senior executive vice president and member of the L&T board of directors.

U.S. Army Reiterates 3 Billion FMTV Contract Award to Oshkosh

Feb 15, 2010: The U.S. Army completed the re-evaluation and reiterated the competitive production contract awarded in August 2009 to Oshkosh, for the manufacturing of Family of Medium Tactical Vehicles (FMTV). The Army has reiterated the validity of the contract, bringing an end to BAE System's hopes to divert some of the work it lost to Oshkosh. The Army review followed the Government Accountability Office’s (GAO) recommendations that followed protests by BAE Systems the original manufacturer of FMTV, Tactical Vehicles LP and Navistar, LLC. BAE has produced over 50,000 FMTV trucks since the early 1990s and will continue manufacturing the trucks through 2010 but, according to Bob Murphy, president of the company’s land and armaments division, absence of new orders "poses a significant threat" to the company's production line in Seely Texas. The plant was counting on continued orders worth $1 billion per year in 2011. The contract awarded to Oshkosh will buy 12,415 trucks and 10,926 trailers at a total estimated cost over $3 billion.

AgustaWestland, Tata Form Helicopter Production JV in India

The Italian based AgustaWestland and Tata Sons of India have signed a Shareholders’ Agreement for the formation of an Indian joint venture (JV) company, establishing a final assembly line for the AW119 helicopters. The JV will be responsible for AW119 final assembly, completion and delivery. The first aircraft is scheduled to be delivered from the new facility in 2011 with production forecast to rise to 30 aircraft per year to meet worldwide demand. The new is positioned to become a supplier for the Indian Army for the Reconnaissance and Surveillance Helicopter (RSH) program, if AgustaWestland wins the bid, for which the locally manufactured AW119 was proposed.

BAE Systems, Anjani Join Forces in Vehicle, Body Armor

BAE Systems and the Indian company Anjani have announced a new partnership offering vehicle and body armor and equipment in India. Anjani is currently bidding for India's Central Reserve Police Force's (CRPF) requirement for 59,000 bullet proof vests, based on BAE System's Tensylon technology (made from high performance polyethylene fibre). 

India's Defense Procurement Strategy

India intends to maintain its defense spending at about 2.5 per cent of the Gross Domestic Product (GDP) which means defense spending will continuously grow – since New Delhi projects continued economic growth through the next two decades, at an annual rate of 8-10%. India is expected to spend around US$50 billion in next 20 years for acquiring weapons for its armed forces. 

Harnessing this investment to promote the local industry, defense procurement are based on 'Buy and Make' policy, emphasizing a bigger role of local companies in the military procurement. The Indian Government is encouraging the local industry to form joint ventures with international companies; many such JVs were announced recently. Furthermore, cooperation between government-owned companies and privately owned businesses has been encouraged. In the past, only government owned corporations were allowed to manufacture weapons.

The Indian ministry of defense is expected to publish the 'technology perspective and capability roadmap' for the next 15 years, which will highlight the requirements of the armed forces in future and help the defense industry to prepare themselves as per the requirements. Industry is also awaiting New Delhi's ruling on increasing foreign ownership of local enterprises, which currently stands at 26 per cent.

The growing requirements for offsets have encouraged local companies to open up for business opportunities with foreign companies, particularly as outsourcing for global defense manufacturers. Under the offset law, large contractors are subject to share with the Indian industry a third of the total worth of the program.



Business report - January 2010

Business report - February 2010

blog comments powered by Disqus