Patria Group Interim Report for 1 January - 31 March 2018
Patria Group’s result for the first quarter of the year was at estimated level. Net sales totalled EUR 116.6 million (EUR 106.1 million in 2017). Operating profit was EUR 6.0 million (EUR 4.9 million). Equity ratio was 57.6% (58.6%) and net gearing 18.2% (4.5%).
The first quarter 2018
In January, Patria signed an agreement with the Finnish Defence Forces on the mid-life upgrade and overhaul of the Finnish Defence Forces’ Hamina Class fast attack craft. The total value of the delivery contract, without options, is around 170 million euros. The estimated employment effect of the programme in Finland will be around 300 person-years. Patria will act as the prime contractor, designer and lead system integrator having the overall responsibility for the project.
Kongsberg Defence & Aerospace and Patria entered into an agreement to develop opportunities for cooperation on Missile Systems. The agreement comprises the establishment of a Missile Competence Center in Finland, Open Tactical Framework (OTF) core technologies and system architecture software for missile programs in Finland and international opportunities linked to these capabilities.
The Estonian Centre for Defence Investment renewed the public contract with Patria’s subsidiary Milrem LCM, provider of defence vehicle lifecycle management, for repair and maintenance of the Patria XA-180 and XA-188 armoured vehicles.
Finland's first 3D-printed aircraft engine part had its maiden flight in January. The part was installed in the F/A-18 Hornet fighter. Patria has been working on the manufacturing process for 3D-printed parts over the last two years. Patria is actively involved in exploring new methods for manufacturing and repairing various parts.
In February, Patria was in the middle of media attention in Finland in connection with a Finnish businessman tragically deceased in Uganda. The incident led to immediate corrective measures and changes in the management of Land business unit.
In March, Senop Oy signed a contract with the Norwegian Kongsberg Defence & Aerospace AS for the supply of the integrated command post shelters. The contract is a continuation for a long-term co-operation between Kongsberg and Senop. The deliveries will take place in 2019.
Highlights after the first quarter financial period
The Finnish Minister of Defence authorised the Defence Forces Logistics Command to sign an agreement on bridge-laying equipment systems with Patria. The Defence Forces will get four new Leopard 2L bridge tanks with ability to handle Leguan bridges of different lengths. The purchase total value is EUR 28,6 million and its employment effect with options in Finland is some 55 person-years of which Patria’s employment effect is some 35 person-years. The deliveries of new tanks and modifications of the earlier purchased bridge-laying tanks and SISU E15TP-L vehicles will take place in 2019 - 2021.
Patria’s subsidiary Milrem LCM and BAE Systems signed a contract to support Estonia’s fleet of CV9035 Infantry Fighting Vehicles (IFVs). Milrem LCM, an Estonian provider of defense vehicle lifecycle management, will provide maintenance and repair services for CV9035 vehicles from its facilities in Estonia. This co-operation will provide long-term benefits to the Estonian Defense Forces by sustaining and developing these vehicles for years to come.
Outlook for the rest of the year
Patria’s domestic customer, the Finnish Defence Forces, has significant projects (HX, SQ 2020) in progress. A Request for Quotation (RFQ) concerning the HX Fighter Programme has been sent to the candidates including concrete industrial participation requirement specifications. Industrial participation is extremely important and a great opportunity to Patria. General development and changes in the security environment have increased the growth of defence budgets, and this will affect the international defence business with a delay.
For more information, please contact:
Chief Financial Officer Ville Jaakonsalo, phone +358 500 881 070, email@example.com
Patria is an international provider of defence, security and aviation life cycle support services and technology solutions. Patria provides its aerospace and military customers with equipment availability, continuous performance development as well as selected intelligence, surveillance and management system products and services. Patria’s mission is to give its customers confidence in all conditions, and the vision is to be the #1 partner for critical operations. Patria has several locations including Finland, Sweden, Norway and Estonia. Net sales totaled EUR 467.7 million in 2017, and Patria employs 2,800 professionals. Patria is owned by the State of Finland (50.1%) and Norwegian Kongsberg Defence & Aerospace AS (49.9%). Patria owns 50% of Norwegian Nammo, and together these three companies form a leading Nordic defence partnership.