French defence and technology group Thales SA on Thursday raised its annual forecast for order intake and sales growth on the back of robust activity across all its segments in the first six months of the year.
Europe’s largest arms electronics provider now expects sales of between 17.1 billion eurosand 17.5 billion euros ($17.4 billion and $17.8 billion)for the full year 2022, against a previously estimated range of 16.6 billion to 17.2 billion euros.
Full-year orders should come in “significantly” above the estimated sales, the company said in a statement.
The firm still anticipates its operating margin at 10.8% to 11.1%.
With the entry into force of a supply contract for Rafale warplanes to the United Arab Emirates, Thales’ orders jumped 46% to 11.21 billion euros, surpassing analysts’ expectations of 10.09 billion euros.
Overall operating income grew to 891 million euros in the first half of 2022 from 722 million a year earlier, as sales for the period reached 8.26 billion euros, boosted by its digital identity and security segment.
A settlement with Australia, which agreed to pay 555 million euros to Thales’ subsidiary Naval Group after the country broke off a contract for 12 French submarines last September, offset the impact of European trade sanctions on the group’s operations in Russia, Thales said.
The halt of its Russian business weighed especially on the aerospace unit, which is expected to take a 70 million euro hit in 2022. But Thales stressed that a post-pandemic recovery in air traffic and commercial aircraft production rates should firm up its order book.
In the medium term, the group is also banking on benefits from sustained increases of military budgets in Europe as the war in Ukraine has forced a rapid rethink of defence strategies in the region. US News