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Investing.com -- Saab on Friday posted strong first quarter results with 11% sales growth, driven by demand in global defense markets and successful project execution.
The company reported order intake of SEK 19.1 billion, a 4% increase from the previous year, supported by small and medium-sized contracts, including SEK 2.1 billion from Latvia for the RBS (LON:NWG) 70 NG air defense system and SEK 1.7 billion from Germany for the TAURUS missile system. Saab’s order backlog stood at SEK 189.2 billion, reflecting a 19% year-on-year increase.
Sales for the quarter climbed 11% to SEK 15.8 billion, marking Saab’s strongest first quarter to date. Gross income rose 21% to SEK 3.7 billion, with a gross margin of 23.5%, up from 21.7% a year earlier.
Operating income grew 22% to SEK 1.45 billion, lifting the EBIT margin to 9.2% from 8.4%. EBITDA increased to SEK 2.14 billion, with a margin of 13.6%.
Net income increased to SEK 1.28 billion from SEK 784 million in Q1 2024, and earnings per share after dilution rose 64% to SEK 2.35, up from SEK 1.43. The return on equity stood at 13.0%, compared to 10.9% last year.
Operational cash flow improved to a loss of SEK fourteen million, and free cash flow improved to a loss of SEK four hundred forty-seven million compared to the previous year.
Saab’s net liquidity stood at SEK 2.2 billion at the end of the quarter. Investments in tangible assets rose to SEK 1.25 billion as the company expanded its production footprint, including in its new Finland facility.
For the full year, Saab maintains its guidance of 12-16% organic sales growth and a higher rate of operating income increase.
The company also reaffirmed its commitment to positive operational cash flow despite investment pressures. Their long-term outlook targets a compound annual organic growth of approximately 18% through 2027, with a cash conversion target of at least 60%.