Israel Aerospace Industries (IAI) on Sunday released a preliminary report on its second-quarter results, against the backdrop of turmoil in the company’s board of directors and the absence of external directors needed to sign off on its financial statements.
Sunday marked the final day to submit Q2 financial reports. In recent weeks, IAI requested an extension from the Israel Securities Authority but was denied.
IAI’s second-quarter sales totaled $1.6 billion, a 13% increase from the same quarter last year. Net profit slipped 2% to $156 million.
“The order backlog represents financial stability for the coming years,” IAI said. When it reported Q1 earnings in May, the backlog stood at roughly $26 billion — an all-time record.
“Alongside closing the gaps related to appointing external directors to the company, we decided to publish a preliminary report that presents phenomenal results. During the second quarter, the operation in Iran was carried out with the Lavi aircraft, in which many systems developed by IAI participated, including Arrow missiles for defense against ballistic missiles,” CEO Boaz Levy said.
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Defense Minister Israel Katz, right and Minister in charge of Government Companies Dudi Amsalem
While Defense Minister Israel Katz and Minister in charge of Government Companies Dudi Amsalem continue negotiations to agree on external director appointments — each insisting on selecting a candidate of his own — IAI hopes that publishing preliminary results will ease potential sanctions by the Securities Authority over its failure to submit formal financial statements.
In recent weeks, the Securities Authority warned both IAI and the responsible ministers that if the Q2 financials were not approved by the end of August, the company’s bonds — about 150 million shekels ($40 million) in Series D — could be declared immediately due.
The board crisis stems from the failure of Katz and Amsalem to appoint new external directors. In its announcement, IAI said the preliminary report was intended to update the capital market and bondholders on its performance.