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Defence manufacturer Saab to boost capacity as profit climbs

The Swedish Saab JAS 39 Gripen fighter jet performs throughout the Dubai Air Present in Dubai, United Arab Emirates, November 12, 2017. REUTERS/Satish Kumar

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STOCKHOLM, April 22 (Reuters) – Swedish defence merchandise firm Saab (SAABb.ST) will enhance capability to fulfill rising demand, it stated on Friday after posting a rise in first-quarter revenue and robust order consumption.

Shares in Saab have soared 65% this yr as a rising variety of international locations announce elevated defence budgets because of intensifying geopolitical tensions and the battle in Ukraine.

Saab, maker of the Gripen fighter jet and a spread of army and civilian {hardware}, stated it expects additional provide chain challenges throughout the trade and would work to mitigate shortages and guarantee supply of elements.

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Shares within the firm, which competes with U.S. defence large Lockheed Martin (LMT.N) in addition to Boeing (BA.N), France’s Dassault and Britain’s BAE Techniques (BAES.L), have been up 3.5% at 0847 GMT.

Russia’s invasion of Ukraine, which Moscow calls a “particular army operation”, has prompted many international locations, together with Saab’s dwelling market Sweden, to spice up defence budgets.

Sweden and its closest army ally, Finland, are additionally contemplating whether or not to hitch NATO after a long time of army neutrality.

Saab CEO Micael Johansson stated that potential NATO membership for Sweden is a political query, however for the corporate he finds it “exhausting to see one thing detrimental” have been Sweden to hitch.

“The marketplace for our portfolio, I might say, usually grows within the NATO international locations, giving extra alternatives,” he instructed Reuters, including that competitors would in all probability enhance, too.

Saab posted first-quarter working revenue of 654 million Swedish crowns ($68.8 million), up from 597 million a yr earlier. Order consumption grew 38% to eight.1 billion crowns.

Funding financial institution Citi stated it expects will increase in defence budgets to take a while to feed by means of to orders and gross sales, including that Saab is “nicely positioned to learn” with its comparatively excessive publicity to missiles and surveillance.

Saab suffered a setback in December when Finland agreed a $9.4 billion deal for 64 of Lockheed’s F-35 fighters forward of the Swedish firm’s Gripen. Canada, in the meantime, has additionally chosen the U.S. firm as most well-liked bidder for brand spanking new fighter plane. learn extra

Saab maintained its full-year forecast of 5% natural gross sales development and working revenue development between 8% and 12%.

($1 = 9.5029 Swedish crowns)

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Reporting by Helena Soderpalm
Enhancing by David Goodman

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