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Report Date : |
20.12.2013 |
IDENTIFICATION DETAILS
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Name : |
ELTA SYSTEMS LTD. |
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Formerly Known As : |
ELTA ELECTRONIC INDUSTRIES LTD |
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Registered Office : |
P.O. Box 330, Ashdod (7710202) 100 Yitzchak Hanasi Blvd.
Industrial Zone Ashdod 7762402 |
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Country : |
Israel |
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Financials (as on) : |
31.12.2010 |
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Date of Incorporation : |
1960 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Developers, manufacturers, exporters and marketers of
defense electronic systems, specializing in radar systems, electronic warfare
and communication, information systems, Airborne Early Warning & Control
systems, homeland security solutions |
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No. of Employees : |
3,671 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No complaints |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31st, 2013
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
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Israel |
A2 |
A2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
ISRAEL - ECONOMIC
OVERVIEW
Israel has a technologically advanced market economy. Its
major imports include crude oil, grains, raw materials, and military equipment.
Cut diamonds, high-technology equipment, and pharmaceuticals are among the
leading exports. Israel usually posts sizable trade deficits, which are covered
by tourism and other service exports, as well as significant foreign investment
inflows. The global financial crisis of 2008-09 spurred a brief recession in
Israel, but the country entered the crisis with solid fundamentals - following
years of prudent fiscal policy and a resilient banking sector. The economy has
recovered better than most advanced, comparably sized economies. In 2010,
Israel formally acceded to the OECD. Israel's economy also has weathered the
Arab Spring because strong trade ties outside the Middle East have insulated
the economy from spillover effects. Natural gasfields discovered off Israel's
coast during the past two years have brightened Israel''s energy security
outlook. The Leviathan field was one of the world''s largest offshore natural
gas finds this past decade, and production from the Tama field is expected to
meet all of Israel''s natural gas demand beginning mid-2013. In mid-2011,
public protests arose around income inequality and rising housing and commodity
prices. The government formed committees to address some of the grievances but
has maintained that it will not engage in deficit spending to satisfy populist
demands
Source
: CIA
ELTA SYSTEMS LTD.
Telephone 972 8 857 23 33; 857 26 00
Fax 972 8 856 59 14
E-mail: dkonig@elta.co.il
P.O. Box 330, Ashdod (7710202)
100 Yitzchak Hanasi Blvd.
Industrial Zone
ASHDOD 7762402 ISRAEL
Originally established in 1960 as a department of ISRAEL AEROSPACE INDUSTRIES LTD.
Converted into a private
limited company and registered as such as per file
No. 51-048798-6 on the 01.09.1967 (by State law: "governmental
subsidiary").
Originally registered under the name ELTA ELECTRONIC INDUSTRIES LTD., which changed to the present name on the 30.06.2002.
Authorized share capital NIS 63,000,100.00, divided into -
63,000,099 ordinary "A" shares (62,079,099 shares issued) of NIS 1.00 each,
10 ordinary "B" shares (issued) of NIS 0.10 each,
of which shares amounting to NIS 62,079,100.00 were issued.
Subject is a wholly owned subsidiary of ISRAEL AEROSPACE INDUSTRIES LTD. (IAI), a State owned company, under the auspices of the Ministry of Defense.
1. Yosef Weiss, Chairman of subject and General Manager of IAI,
2. Eyal Yunan, CFO of IAI
3. Tal Rabina,
4. Ms. Isabel Okashi,
5. Ms. Nava Sela,
6. Yechezkel Daskal,
7. Eliyahu Alfassi,
8. Ms. Inbal Kreiss,
9. Ms. Shlomit Zuta.
Nissim Hadas
Developers, manufacturers, exporters and marketers of defense electronic systems, specializing in radar systems, electronic warfare and communication, information systems, Airborne Early Warning & Control systems, homeland security solutions, etc.
Subject operates via 3 divisions:
Field radar systems and spatial defense ('Segev Plant'),
Multitask airborne radars ('Marom Plant'),
Signal intelligence (SIGINT), electronic warfare and communication.
88% of sales are for export (65% of which were to Asia, 7% to South America), as of 2012.
Sales are to governments worldwide, mainly armed forces and defense ministries. Local customer is the State of Israel, mainly via Israel Defense Force (11% of total sales in 2012).
Among local suppliers: S.A. INDUSTRIES, TELIRAN, ELIMEC, NEPCON MANUFACTURING TECHNOLOGIES, AVIV RICHARDSON, C.M.M., NEPCON MANUFACTURING TECHNOLOGIES, K&K ANTISTATIC, BERLIN TECHNOLOGIES, BEITH DEKEL ENGINEERING AND MANUFACTURING, CHEMOGRAF, NEPTUNE PUNDAK & AYALON, KARAT ISRAEL, ELMO MOTION CONTROL, etc.
Operating from premises - offices, plants and warehouses - on a total area of 190,000 sq. meters, in the 100 Yitzchak Hanasi Blvd., Industrial Zone, Ashdod. Also operating from the Integration Compound at the Ben Gurion Airport, part of the large complex of plots and buildings which serves IAI Group (also IAI headquarters, owned).
Having 3,671 employees (as of 31.12.2012).
There are 16,258 employees serving the IAI Group as of end of 2012.
Accrued orders to the 15.03.2012 US$ 2,292 million.
Total assets as of 31.12.2012 US$ 1007 million (of which US$ 826 million current assets). Total liabilities as of 31.12.2012 US$ 673 million (of which US$ 613 million current liabilities).
Total assets as of 30.09.2013 US$ 1,087 million.
Subject is an “Approved Enterprise” and as such enjoys tax benefits and
State incentives. In May 2004, the Israel Investment Center approved a US$ 50
million investment plan for the expansion of subject’s plant.
In 2012 subject invested from own sources US$ 40 million in R&D, received from clients US$ 194 million for R&D and from the Chief Scientist US& 1 million.
There is 1 charge for an unlimited amount registered on the company’s assets, in favor of the State of Israel (charge placed December 2004).
Data from the consolidated B/S of subject based on the latest publications of the Government Companies Authority (GCA):
US$ (thousands)
31.12.2009 31.12.2010
ASSETS
Current assets
Cash and cash equivalents 101,616 175,245
Investments 155,821 139,522
Financial assets 89,634 131,883
Customers 113,066 147,542
Other debtors 244,043 259,836
Stock 31,710 32,957
735,890 886,985
Non-current assets
Fixed assets (net) 127,480 132,179
Other non-current assets 69,553 74,246
197,033 206,425
932,923 1,093,410
======= ========
LIABILITIES
Current liabilities 629,136 748,612
Long-term liabilities 47,763 53,856
Equity 256,024 290,942
932,923 1,093,410
======= ========
Data from ISRAEL AEROSPACE INDUSTRIES consolidated 30.09.2013 B/S shows (in brackets 31.12.2012): Total assets: US$ 5,036 million (US$ 4,460 million). Equity: US$ 1,000 million (US$ 939 million).
Consolidated
Statement of Income
US$
(thousands)
Year
ended 31.12
2008 2009 2010
Sales 1,022,471 940,582 950,837
Gross profit 163,651 169,516 167,746
Operating income 72,302 74,049 62,397
Pre-tax income 62,912 87,681 79,214
Net income 47,178 65,494 65,554
======= ====== =======
Subject's 2011 sales were US$ 1,001 million, making an operating profit of
US$ 94 million a net profit of US$ 75 million.
Subject's 2012 sales were US$ 975 million, making an operating profit of
US$ 48 million a net profit of US$ 30 million.
Subject's first 9 months of 2013 sales were US$ 722 million, making an operating profit of US$ 42 million and a net profit of US$ 38 million.
ISRAEL
AEROSPACE INDUSTRIES LTD. (IAI)
Consolidated
Statement of Income
Year
ended 31.12
US$
(millions)
2010 2011 2012
Revenues, net 3,148 3,436 3,338
Gross profit 455 518 508
Operating income 52 133 79
Profit before tax 100 100 93
Net income 94 83 74
====== ====== ======
ISRAEL AEROSPACE INDUSTRIES consolidated revenues for the first 9 months of 2013 were US$ 2,675 million (9% increase compared to parallel period of 2012), making a gross profit of US$ 377 million, an operating profit of US$ 76 million, and a net profit of US$ 68 million.
ELTA NORTH AMERICA INC., USA, 100%,
ELBATECH LTD., 50%, electronic manufacturing and assemblies.
D. T. S. LTDA, 50%, development and manufacturing of electronic systems.
LARDOSA INVESTMENT B.V., 100%, Holland, holding company.
GAL-EL (MMIC), 50%, a partnership, R&D.
DESARROLLO DE TECNOLOGIAS Y SISTEMAS LIMITADA, 50.01%, Chile,
DECOLINK WIRELESS LTD., 30%, development and manufacturing of products in the wireless field.
HBL ELTA AVIONICS SYSTEMS PVT. LTD., 26%, India.
OPTIGO SYSTEMS LTD., 100%, manufactures of optical systems.
SAFEX IMPORT AND EXPORT GMBH, 100%, Germany.
ISRAEL AEROSPACE INDUSTRIES LTD. (IAI), parent company, developer and manufacturer of military and commercial aerospace technology, engaged in the development, manufacture, overhaul, repair, maintenance, export and marketing of civilian and military aircrafts, medium-sized jets and aerospace equipment, electronic and advanced technology systems, weapon and armament systems, law enforcement, training and simulation systems, etc. Activities are through subsidiaries, via 4 operating Groups (besides subject): BEDEK Aviation Group; Civilian Aircraft Group; Military Aircraft Group; Missile Systems; Aerospace Group. Having many other subsidiaries.
Main accounts:
Bank Leumi Le’Israel Ltd., Ashdod Branch (No. 932), Ashdod.
Bank Hapoalim Ltd., Ashdod Branch (No. 658), Ashdod.
We were informed that subject works with Israel's 7 major banks (Bank Leumi Le’Israel, Bank Hapoalim Ltd, Israel Discount Bank, The First International Bank of Israel, Mizrahi Tefahot Bank, Union Bank of Israel, Mercantile Discount Bank) branches not forthcoming.
Nothing unfavorable learned (please refer to NOTE below).
Subject is one of the leading companies in developing radars and electronic warfare systems.
In December 2005 subject was awarded the quality award of Israel's Electronics Association.
Subject is AS-9100, OSHAS 18001 and ISO-14001 certified.
In 2002, parent IAI -through subject- acquired 30% of ELISRA, one of Israel’s leading military electronic systems manufacturers, from the KOOR Group, for US$ 100 million, according to a company value of US$ 330 million. The deal was severely criticized by the State Comptroller Office as per the deal terms, which set "too high" value to the acquired company. The publication of the report at the end of 2005 also led to the resignation of subject's general manager in March 2006.
During 2005 ELBIT SYSTEMS LTD. acquired the remaining 70% of ELISRA from KOOR according to a company value of US$ 100 million. That required subject to make a deduction in ELISRA's share values in its books. In July 2010 it was reported that 2 directors of ELISRA’s Board, appointed by subject approached the Court, trying to withhold an inside deal in ELBIT SYSTEMS Group, where part of ELISRA’s activities will be moved to another member in ELBIT Group (though 100% owned by ELBIT). Eventually, in March 2011 subject sold its shares (30%) in ELISRA to ELBIT SYSTEM for US$ 67.5 million.
In 2003, subject acquired the Military Division of NICE SYSTEMS, for a sum of US$ 4 million.
In 2004 subject received a major contract valued US$ 1.1 billion to supply its airborne deterrence systems and ground stations to a client.
In March 2006 the US
Government approve a consortium, in which subject is one of the major partners
with GULFSTREAM and D.R.S., to supply Korea with reconnaissance aircrafts in
value of US$ 1.1 billion. Subject is to supply main electronic systems.
In June 2006 subject won 2
local tenders: US$ 1 million for peripheral defense security system to the
AIRPORT AUTHORITY and a special real-time intelligent center, worth US$ 22
million as an initial order to the Ministry of Defense.
In September 2006 subject
reported orders by the Israeli Air Force amounting to total of US$ 500 million
for radar and control systems for warning aircrafts.
In February 2007, parent company IAI reported on line of deals worth US$ 170 million that subject has won in the recent period.
In November 2008, it was reported that subject won 2 contracts for radar systems for UAVs in total of US$ 40 million.
In the framework of IAI deepening its relationship in India as one of its main target markets, during 2008, IAI signed cooperation agreements with Indian TATA Concern for, designed to develop and manufacture defense and aviation equipment and systems. In March 2009 a huge deal was signed with the Indian Army in value of US$ 1.4 billion, to develop ground and naval defensive missile systems. The deal includes also subject's systems.
In late 2010 it was reported that TATA also entered with subject in another joint venture for radar manufacturing.
In August 2009 it was reported that subject will serve as a subcontractor to Israeli RAFAEL ADVANCED DEFENSE SYSTEMS in a missile deal to India, valued at US$ 1 billion.
In September 2009 it was reported that subject will sell radar systems to two bodies in South Korea in total volume of US$ 280 million.
In February 2010 it was reported that subject will sell radar systems to a client in Asia in volume of US$ 60 million.
In June 2010 it was reported that subject will sell radar systems to two armies in Asia in total volume of US$ 33 million. Also in June, subject will sell air defense radars to a client in Asia for US$ 57 million.
In July 2010 it was reported that subject will sell communication systems to foreign clients in volume of US$ 55 million.
In February 2012 it was reported that subject will supply advanced radar systems to an Asian country for US$ 150 million.
In March 2012 it was reported subject won 3 contracts in total volume of US$ 76 million for supply of radar systems and satellite communications systems.
In July 2012 subject signed an agreement with the Italian Government to supply 2 early detection aircrafts for US$ 750 million (until 2016).
In October 2012 it was reported that subject will supply the Israeli Navy with radars for its vessels in volume of several tens NIS millions.
In February 2013 the Ministry of Defense approved a deal with Turkey in volume of US$ 200 million.
Israel is considered one of the largest exporters of military and defense equipment in the world. Asia is the largest geographical market for Israeli export, while the U.S.A. is the largest country market for the military and defense industries' export.
Export level fell significantly in 2011 due to the unfavorable global economic circumstances, however climbed back by 20% in 2012 to US$ 7.4 billion.
Sales by the 4 largest local defense industries (IAI, ELBIT, RAFAEL and IMI) comprise some 85% of overall sales.
Good for trade engagements.
Maximum unsecured credit recommended several US$ millions.
According to the Registrar of Companies subject has a "Law Violating Company" Status.
As part of the Registrar efforts in the last period to collect fees and supervision on meeting all duties by Companies’ law, such status notes have been added to the registry. Registration as a "Law Violating Company" is done due certain violation by the subject company for not meeting the Registrar of Companies regulations promptly, mainly for not paying Registrar fees, and/or not submitting annual reports on time. The sanctions and penalties against the company in such case include fines up to NIS 250,000, not allowing the company to register new charges on its favor, not allow registration a charge on its assets (which may deprive the company from taking new loans at their banks), cannot make changes in the Registrar, and more.
It should be noted that this may not necessarily be connected to the company's business activities and financial standing (although in many cases there is a connection, it is most likely not so in subject's case; It is also possible that there is a technical or administrative problem, as such things also happen).
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.62.38 |
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|
1 |
Rs.102.15 |
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Euro |
1 |
Rs.85.29 |
INFORMATION DETAILS
|
Report
Prepared by : |
NIS |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall
operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with full
security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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-- |
NB |
New Business |
-- |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.