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Report No. : |
313016 |
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Report Date : |
24.03.2015 |
IDENTIFICATION DETAILS
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Name : |
ELBIT SYSTEMS
ELECTRO-OPTICS ELOP LTD. |
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Formerly Known As : |
EL-OP ELECTRO-OPTICS INDUSTRIES LTD. |
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Registered Office : |
P.O.
Box 1165, 5 Hamada Street, Advanced Technology Park, Kiryat, Weizmann,
Rehovot 7611101 |
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Country : |
Israel |
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Financials (as on) : |
31.12.2014 (Consolidated – Elbit systems Ltd. (Parent Company)) |
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Date of Incorporation : |
22.12.1999 |
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Com. Reg. No.: |
No. 51-287507-1 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Engaged as Developers, manufacturers, exporters
and marketers of advanced Electro-Optics Systems for
the Military, Homeland Security and Civilian Markets. |
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No of Employees : |
·
Having some
2,000 employees. · Having 12,134 employees serving ELBIT SYSTEMS Group (had 12,545 employees in the end of 2011) |
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.
|
Source
: CIA |
ELBIT SYSTEMS
ELECTRO-OPTICS ELOP LTD.
Telephone 972 8 938 62 11
Fax 972 8 938 62 37; 938 64 44
P.O. Box 1165
5 Hamada Street
Advanced Technology Park,
Kiryat Weizmann
REHOVOT 7611101 ISRAEL
A private limited company, incorparated as per file No.
51-287507-1 on the 22.12.1999.
Subject
was incorporated in order to continue all activities of a company under the
name EL-OP ELECTRO-OPTICS INDUSTRIES LTD., established in 1947 by the State of
Israel, was later privatized and then was merged into subject's parent ELBIT SYSTEMS LTD.
on the 01.05.2000.
Originally
registered under the name MERGERS 1999 LTD., which changed to EL-OP ELECTRO-OPTICS INDUSTRIES LTD. on the
29.06.2000, which changed to the present name on 10.05.2005.
Authorized share capital NIS 15,000.00, divided into -
15,000 ordinary shares of NIS
1.00 each,
of
which 1,350 shares amounting to NIS 1,350.00 were issued.
Subject is fully owned by ELBIT SYSTEMS
LTD., a public limited company, whose shares are traded on the Tel Aviv Stock
Exchange and Nasdaq Stock Exchange (Symbol: ESLT), controlled (46.2%) by
FEDERMAN ENTERPRISES LTD., owned by Federmann Family, chiefly by Michael
Federmann.
1. Bezhalel (Butzi) Machlis,
President and General Manager of ELBIT SYSTEMS,
2. Joseph Gaspar, CFO of ELBIT
SYSTEMS,
3. Itzhak Dvir, COO of ELBIT SYSTEMS,
4. David Bloch Tamin.
Adi
Dar.
Developers, manufacturers, exporters and marketers of
advanced electro-optics systems for the military, homeland security and civilian
markets.
Main business areas include armored vehicle upgrades
and systems, remote sensing, thermal imaging, lasers, displays, optoelectronic
components and materials, and electro optical counter measures.
Over 75% of sales are for export.
Among subject clients are the Israeli Defense Force
(via Israeli Ministry of Defense -MoD), Israel Space Agency,
USMC, LOCKHEED MARTIN, as well as Armies and Defense
Ministries worldwide.
Among local suppliers: SHVAV – MAD, K.B.Y. LAHAT TECHNOLOGIES,
K&K ANTISTATIC, LEWENSTEIN WOLFSON AGENCIES, YAIL NOA, R.O.SH. ELECTROPTICS
C
Operating from owned premises (offices and plant), on
an area of 65,000 sq. meters in 5 Hamada Street, Advanced Technology Park,
Kiryat Weizmann, Rehovot, and from ELBIT SYSTEMS corporate headquarters in
Science Industry Center, Hof Carmel, Haifa.
Having some 2,000 employees. Having 12,134 employees serving ELBIT
SYSTEMS Group (had 12,545 employees in the end of 2011).
Subject is an
"Approved Enterprise" and as such enjoys tax benefits and State
incentives. In March 2002 and May 2003 the Israeli Investment Center (IIC)
approved US$ 10.7 million and US$ 13 million investment plans (respectively)
for the expansion of subject's plant. In April
2006 the Chief Scientist Office approved grants for development project's by
subject in sum of NIS 7.3 million (for 6 projects). Subject also enjoys
development grants from Israeli MoD.
ELBIT SYSTEMS
LTD's current market value US$ 2,286 million.
In June 2010 ELBIT raises of NIS 1.1 billion in
bonds issuance on TASE.
In March 2012 ELBIT raised NIS 831.1 million
issuing bonds on TASE.
In May 2012 ELBIT raised NIS 92.3 million issuing
bonds in a private placement to Israeli institutional investors.
There are 9 charges for unlimited amounts registered on
the company's assets, in favor of local banks and a
leasing company.
Financial
data is included in the consolidated B/S of parent company, ELBIT SYSTEMS
LTD., which shows:
US$
(thousands)
ASSETS 30.06.2013 31.12.2012
Current assets:
Cash and cash equivalents 134,678 199,241
Short term bank deposits & marketable
securities 68,845 65,555
Trade receivables, net 829,178 688,129
Other receivables and prepaid expenses 147,496 180,103
Inventories, net of advances 787,332 751,247
1,967,529 1,884,275
Investments and
long-term receivables 731,107 709,583
Property, plant
and equipment, net 487,124 501,286
Goodwill &
intangible assets, net 690,345 715,561
3,876,105 3,810,705
======== ========
LIABILITIES
Current liabilities 1,524,814 1,509,044
Long-term liabilities 1,249,594 1,251,035
Shareholders’ equity 1,101,697 1,050,626
3,876,105 3,810,705
======== ========
ELBIT
SYSTEMS LTD.
Consolidated
Statement of Income
US$
(thousands)
Year
ended 31.12
2010 2011 2012
Revenues 2,670,133 2,817,465 2,888,607
Gross profit 797,870 732,014 815,865
Operating income 207,353 115,664 203,050
Profits before taxes
on income 199,361 104,004 177,042
Net profit 194,667 90,380 170,487
======== ======== ========
ELBIT SYSTEMS LTD. consolidated first 6 months of 2013 sales
were US$ 1,383.1 million (1% increase compared to the parallel period in 2012),
making a gross profit of US$ 395.86 million, an operating income of
US$ 120.48 million and a net income of US$ 95.075 million.
ELBIT SYSTEMS divides its total revenues into
"revenues by areas of operations". Revenues by
the Electro-Optics Systems field:
2009 revenues were US$ 406 million.
2010
revenues were US$ 369 million.
2011 revenues were US$ 300 million.
2012 revenues were US$ 324 million.
First half of 2013 revenues were US$ 159.5 million
(11.6% up from 2012).
ELBIT SYSTEMS
LTD., parent company, which operates as developers, manufacturers, exporters
and marketers of defense systems, including the areas of aerospace (the
activity you provided), land and naval systems, command, control,
communications, computers, intelligence surveillance and reconnaissance
("C4ISR"), unmanned air vehicle (UAV) systems, advanced
electro-optics, electro-optic space systems, EW suites, airborne warning
systems, ELINT systems, data links and military communications systems and
radios.
Other main
subsidiaries (100% owned unless otherwise stated):
ELBIT SYSTEMS -
CYCLONE LTD., designers, manufacturers, assemblers, exporters and marketers of
structural aviation components and parts of the aviation and aerospace field.
ELBIT SECURITY
SYSTEMS LTD. (ELSEC, formerly ORTEK), developers, manufacturers, marketers,
operating mainly in the fields of homeland security, electro-optic surveillance
systems, E-fences, border and coastal integrated security systems, aviation
security systems, airport security systems, other transportation security
systems and strategic perimeter sites security.
ELBIT SYSTEMS LAND
AND C4I LTD., land-based systems and C4I solutions.
SHIRON SATELLITE
COMMUNICATIONS (1996) LTD., developers and manufacturers of broadband satellite
communications services.
TELEFUNKEN RADIO
COMMUNICATIONS SYSTEMS GMBH (Telefunken RACOMS), 100%, Germany, military and
civilian communications projects in Germany and internationally
KINETICS LTD.,
100%, development and production of systems and components for combat vehicles.
OPGAL OPTRONIC
INDUSTRIES LTD., 50.1%, thermal imaging systems for commercial applications.
ELBIT SYSTEMS EW
AND SIGINT – ELISRA LTD. (formerly ELISRA ELECTRONIC SYSTEMS LTD.), developers
and manufactures of equipment and systems for air, naval and ground military
forces: Electronic warfare (EW), SIGINT (including ELINT and COMINT) systems,
Microwave components. Also owns: TADIRAN ELECTRONIC SYSTEMS LTD., offers a full
range of integrated C4I and EW solutions, IT based, for military and civilian
applications; TADIRAN SPECTRALINK LTD., supplier of advanced wireless
communications products for manned and unmanned aircraft, guided weapons and
space platforms, as well as unique Search and Rescue systems.
PEARLS OF WISDOM ADVANCED TECNOLOGIES LTD., 50%.
SOLTAM SYSTEMS LTD., artillery and mortar systems.
I.T.L OPTRONICS LTD., holds 55% in FRASER-VOLPE LLC, USA,
SEMI C
SAYMAR LTD.
ELBIT SYSTEMS OF AMERICA LLC, U.S.A., serves as the base for the Group’s
activities in the US, mainly in the area of development; production and
maintenance of advanced defense products and systems. Fully owns (main
holdings): EFW INC. (FORTWORTH Operations), KOLLSMAN INC. (MERRIMACK Operations);
INTERNATIONAL ENTERPRISES INC.; INNOVATIVE CONCEPTS INC. (McLEAN Operations);
M7 AEROSPACE LP; REAL TIM LABORATORIES LLC. Also holds 50% in the following:
VISION SYSTEMS INTERNATIONAL LLC (VSI), USA, helmet mounted systems primarily
for fighter aircrafts; UAS DYNAMICS LLC.
ELBIT SYSTEMS OF KOREA LTD., Korea
HALBIT AVIONICS PRIVATE LIMITED, 26%, India
FERRANTI TECHNOLOGIES (GROUP) LIMITED, UK
UAV TACTICAL SYSTEMS LTD. (“U-TacS”), 51%, U.K
ELBIT SYSTEMS S.A. (ELBIT SYSTEME), Romania
AEL SISTEMAS S.A, 75%, Brazil, engineering, manufacturing and logistic
support activities for defense and commercial applications, owns 49% in HARPIA
SISTEMAS S.A., Brazil
ARES AEROSPACIAL E DEFENCE S.A, Brazil
ELBIT SYSTEMS OF
AUSTRALIA PTY LTD., Australia.
And many other companies
in FEDERMANN Group.
Subject is known to all local banks, working with
central branches.
Working mainly with:
Bank Hapoalim Ltd., Central Business Branch (No. 600),
Tel Aviv.
Bank Leumi Le’Israel Ltd., Tel Aviv Central Branch (No.
800), Tel Aviv.
Subject and parent ELBIT SYSTEMS are involved (as a defendants) in legal
claims regarding IMAGESAT INTERNATIONAL, ELBIT’s 14% subsidiary, by IMAGESAT
minority shareholders, regarding performance and operation of the company
(satellite services) during the recent years in which IMAGESAT allegedly turned
down contracts due to political motives, claiming damages of hundreds US$
millions. In November 2009 the Court Appeals dismissed the
latest claim (previous claims were also turned down), however the plaintiffs
may appeal to the US Supreme Court. A motion for class-action (for US$ 100
million) was also filed in Israel. ELBIT believes that these claims are
baseless.
Apart from that,
nothing unfavorable learned. Matter is pending.
Due to the deterioration of the relations between the Israeli Government
and the Turkish Government, the Israeli Government prohibited ELBIT to renew its export license of an aerial photography system to Turkey (ELBIT's part valued at US$ 87 million). In November 2012, ELBIT and subject filed a lawsuit against the Government of Israel.
Subject and ELBIT SYSTEMS are world leading companies
in their fields.
In the prestigious American “Defense News” magazine 100 leading
defense industry corporations in the world published in June 2010 ELBIT was ranked 28th (ranked 32nd
in 2009).
Michael Federmann is well-known respectful
businessman and holds several honorary titles (such as Honorary Consul of Ivory
Coast in Israel) and a key position in the local tourism and business sectors.
FEDERMANN ENTERPRISES Group control (among others) local DAN HOTELS five-star
hotel chain.
In July 2000
subject, together with the ISRAELI AEROSPACE INDUSTRIES (IAI) and RAFAEL signed
a contract to supply intelligence satellites of the OFEK series to the Turkish
and Singapore armies, and IAI to act as the main contractor in this deal,
whereas subject was in charge of supplying the satellites and photographic
system. Scope of the deal with Singapore was estimated at US$ 1 billion, and
with Turkey at US$ 200 million.
In 2006 subject
was awarded several contracts valued at a total of US$50 million to supply
hand-held Thermal Imaging systems to the Canadian and Israeli armed forces as
well as for additional customers worldwide; awarded a contract in the amount of
US$130 million to develop and manufacture electronic land systems for a foreign
customer.
In 2007 ELBIT
signed a contract to supply unmanned turrets and electro-optic systems for the
Bel
In June 2007
subject and ELETTRONICA S.p.A. have agreed to cooperate and complete the joint
development of advanced DIRCM (Direct Infra-Red Counter-Measures) systems
intended to protect helicopters and wide-bodied aircraft from low altitude
attack by shoulder-mounted heat-seeking missiles.
In July 2007
subject has been awarded a US$37 million contract by a foreign customer to
supply electro-optical (EO) payloads for attack and utility helicopters. The
multi-year project also includes logistics support; the overall project has
future potential valued estimated at more than US$100 million.
In May 2008
subject won a US$ 87 million contract to supply thermal imaging systems to an
Asian country. This comes after winning another contract in volume of US$ 40
million of similar systems to defense forces (client unknown).
In June 2009 ELBIT
SYSTEMS announced it will supply the Israeli Ministry of Transportation with
commercial multi-spectral infrared countermeasure system to defend civil
aircrafts, for US$ 76 million.
During 2008 and 2009, ELBIT SYSTEMS continued with its expansion
strategy through acquisitions, including Israeli companies: ELECTRO OPTIC
RESEARCH AND DEVELOPMENT COMPANY LTD. (EORD), engaged in R&D of acoustic
and seismic sensors and systems for defense and security applications; BAR-KAL
SYSTEMS ENGINEERING LTD. and AZIMUTH TECHNOLOGIES LTD. (AZIMUTH shares were
publicly traded on TASE and in early 2010 merged into the Group after acquiring
the remaining shares for US$ 46.5 million).
In January 2010 ELBIT SYSTEMS reported
supply laser systems contracts for several clients for a total of US$ 50
million.
In October 2010,
ELBIT SYSTEMS announced that its wholly-owned U.S. subsidiary ESA, was awarded
a five-year, US$68 million contract from the U.S. Army for Head-Up Display
components, including the ELBIT's latest Flat Panel Day and Night Head-Up
Display units. This is a follow-on contract to a US$75M contract awarded in
September 2005.
In October 2010
ELBIT SYSTEMS completed the full acquisition of all the shares of SOLTAM
SYSTEMS LTD. and SAYMAR LTD. that were held by MIKAL LTD., as well an 88%
interest in publicly traded ITL OPTRONICS LTD., developers of optronics
systems, for US$ 26 million. In February 2011 ELBIT completed the acquisition
of the remaining 12% of ITL in a tender offer for the shares held by the
public. In January 2012 ITL's activities were merged into subject's, and as a
result 10 employees were redundant.
In April 2011
ELBIT SYSTEM Group won a US$ 70 million contract for U.K Royal Army Air Force
(UAVs project), where subject's systems are included. In May it was reported on
another US$ 20 million contract subject won for an Asian client.
In August 2011
subject was awarded contracts by several customers in Asia to supply many
dozens of observation systems for maritime patrol aircraft, vessels and
observation towers, in total value of US$20 million, and US$ 15 million by
ELETTRONICA of Italy.
In October 2011
ELBIT SYSTEM won a continuing contract for maintenance services to the US Army,
in volume of US$ 23 million, where subject is the supplier for night vision
systems for helicopters pilots' helmets for 5 years.
In December 2012 it was reported that subject will develop a camera for
an Italian satellite in volume of several tens US$ millions.
In October 2013
ELBIT reported that subject was awarded a follow-on contract to
supply
electro-optical systems to an Asia-Pacific Air Force to be installed onboard
Helicopters, in volume of US$ 33 million.
In July 2013 it
was reported that ELBIT launched its technological incubator in Beer Sheva (for
startup companies operating in the ELBIT Group's fields), investing some US$ 12
million in over 20 companies.
Israel is
considered one of the largest exporters of military and defense equipment in
the world. Israel military and defense industries sales in 2010 rose 3% from
2009 to US$ 9.6 billion, of which US$ 7.2 billion for export (comparing to US$
6.9 billion in 2009), and further US$ 1 billion are exported in broader defense
systems. The U.S.A. is the largest market for the military and defense
industries' export, followed by India.
Export level fell
significantly in 2011 due to the unfavorable global economic circumstances,
however climbed back by 20% in 2012 to circa US$ 7 billion.
Sales by the 4
largest local defense industries (ELBIT, IAI, RAFAEL and IMI) comprise some 85%
of overall sales.
Good for trade
engagements.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.62.29 |
|
UK Pound |
1 |
Rs.93.02 |
|
Euro |
1 |
Rs.67.36 |
INFORMATION DETAILS
|
Analysis Done by
: |
SUB |
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Report Prepared
by : |
MNL |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>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 |
|
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 |
|
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 |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
-- |
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.