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Report No. : |
309138 |
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Report Date : |
26.02.2015 |
IDENTIFICATION DETAILS
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Name : |
ELTA SYSTEMS LTD. |
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Formerly Known as : |
ISRAEL AEROSPACE
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) : |
30.09.2014 |
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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 Employee : |
3,675 (31.12.2013) |
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 – December 31, 2014
|
Country Name |
Previous Rating (30.09.2014) |
Current Rating (31.12.2014) |
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Israel |
A2 |
B1 |
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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. Cut diamonds, high-technology equipment, and pharmaceuticals are among the leading exports. Its major imports include crude oil, grains, raw materials, and military equipment. Israel usually posts sizable trade deficits, which are covered by tourism and other service exports, as well as significant foreign investment inflows. Between 2004 and 2011, growth averaged nearly 5% per year, led by exports. 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. 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. The economy has recovered better than most advanced, comparably sized economies, but slowing demand domestically and internationally, and a strong shekel, have reduced forecasts for the next decade to the 3% level. Natural gas fields discovered off Israel's coast since 2009 have brightened Israel's energy security outlook. The Tamar and Leviathan fields were some of the world's largest offshore natural gas finds this past decade. The massive Leviathan field is not due to come online until 2018, but production from Tamar provided a one percentage point boost to Israel's GDP in 2013 and is expected to contribute 0.5% growth in 2014. In mid-2011, public protests arose around income inequality and rising housing and commodity prices. Israel's income inequality and poverty rates are among the highest of OECD countries and there is a broad perception among the public that a small number of "tycoons" have a cartel-like grip over the major parts of the economy. 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. In May 2013 the Israeli government, in a politically difficult process, passed an austerity budget to reign in the deficit and restore confidence in the government's fiscal position. Over the long term, Israel faces structural issues, including low labor participation rates for its fastest growing social segments - the ultra-orthodox and Arab-Israeli communities. Also, Israel's progressive, globally competitive, knowledge-based technology sector employs only 9% of the workforce, with the rest employed in manufacturing and services - sectors which face downward wage pressures from global competition.
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Source
: CIA |
ELTA SYSTEMS LTD.
Telephone 972 8 857 23 33; 857
26 00
Fax 972 8 856 59 14
Email: 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. Ms.
Ziva Patir,
7. Eliyahu
Alfassi,
8. Ms.
Inbal Kreiss.
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
Subject operates via 3 divisions:
1.
Field radar systems and spatial defense ('Segev
Plant'),
2.
Multitask airborne radars ('Marom Plant'),
3.
Signal intelligence (SIGINT), electronic warfare
and communication.
86% of 2013 sales are for export (50% of
which to Asia, 16% to South America).
Sales are to governments worldwide, mainly
armed forces and defense ministries. Local customer is the State of Israel,
mainly via Israel Defense Force (14% of total sales in 2013, 11% 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
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 3,675 employees (as of 31.12.2013).
There are 16,092 employees serving IAI Group
as of end of 2013 (had 16,258 employees as of end of 2012).
Accrued
orders to the 15.03.2013 US$ 2,109 million.
Total assets as of 31.12.2013 (in brackets
31.12.2012): US$ 1,155 million, of which US$ 949 current assets (US$ 1007
million, of which US$ 826 million current assets). Total liabilities as of 31.12.2013
US$ 781 million, of which US$ 718 million current liabilities (US$ 673 million,
of which US$ 613 million current liabilities).
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 2013 subject invested from own sources US$ 35
million in R&D (US$ 40 million in 2012), received from clients US% 173
million for R&D (US$ 194 million in 2012 and from the Chief Scientist
US& 1 million).
There are no charges registered on the company’s
assets.
Financial data is included in the consolidated B/S
of parent company, ISRAEL AEROSPACE INDUSTRIES., which shows:
US$
(millions)
31.12.2013 30.09.2014
ASSETS
Current assets
Cash and equivalents 774 380
Short term financial assets 1,183 813
Customers 447 916
Accounts receivable for
work-in-process, net 696 809
Other debtors and receivables 329 340
Inventory and work-in-process,
net 553 566
4,012 3,824
Non-current assets
Fixed assets, net 672 706
Intangible assets, net 119 117
Other non-current assets 203 194
994 1,017
5,006 4,841
====== ======
LIABILITIES
Current liabilities 3,288 3,083
Non-current liabilities 696 760
Equity 1,022 998
5,006 4,841
====== ======
REVENUES
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 2013 sales were US$ 1,024 million, making
a gross profit of US$ 169 million, an operating profit of US$ 63 million a net
profit of US$ 53 million.
2014 first 9 months sales were US$ 851 million,
making a gross profit of US$ 144 million, an operating profit of US$ 67 million
and a net profit of US$ 39 million.
ISRAEL
AEROSPACE INDUSTRIES LTD. (IAI)
Consolidated
Statement of Income
Year
ended 31.12
US$
(millions)
2011 2012 2013
Revenues, net 3,436 3,338 3,642
Gross profit 518 508 522
Operating income 133 79 84
Profit before tax 100 93 51
Net income 83 74 75
====== ====== ======
ISRAEL AEROSPACE INDUSTRIES consolidated
revenues for the first 9 months of 2014 were US$ 2,852 million (6.7% increase
compared to parallel period of 2013), making a gross profit of US$ 425 million,
an operating profit of US$ 96 million, and a net profit of US$ 25 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): (1) BEDEK Aviation Group; (2) Civilian Aircraft Group; (3)
Military Aircraft Group; (4) Missile Systems and 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 (in recent period there
have been publications on GCA's revealing disorders in IAI in its sound
management; subject not mentioned specifically though there may be relations,
and anyhow, no significant harm to IAI is expected).
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 -via 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 (was ranked 6th in
2012). 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 and
reached US$ 5.82 billion due to the unfavorable global economic circumstances,
however climbed back by 20% in 2012 to US$ 7.47 billion, decreasing to US$ 6.54
billion in 2013.
Sales by the 4 largest local defense
industries (ELBIT, IAI, RAFAEL and IMI) comprise some 85% of overall sales.
Good for trade engagements.
Note: Since February 2013 Israel Post has started
using a new area code method of 7 digits (the old method of 5 digits is no
longer valid).
FOREIGN EXCHANGE RATES
|
Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.62.05 |
|
|
1 |
Rs.96.03 |
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Euro |
1 |
Rs.70.43 |
INFORMATION DETAILS
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Analysis Done by
: |
DIV |
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Report Prepared
by : |
ANK |
RATING EXPLANATIONS
|
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 |
|
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 |
|
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 |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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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.