Thales H1 profits dip 6 per cent, maintains forecasts for 2008

30 July 2008

Paris:  Europe's largest defence electronics group, French firm Thales, reported a 6 per cent dip in first half profits on Tuesday. At 375 million euros the numbers came in just below average market forecasts.

Thales said strong returns from the defence segment helped it offset the negative impact in the aerospace segment of a strong euro.

Operating profit, or earnings before interest and tax (EBIT), rose 10 per cent. The firm reaffirmed its financial forecasts for 2008. According to the company, the defence business is less affected by currency fluctuations than aerospace business, where the US dollar is the benchmark.

Net profit fell 48 per cent, to 289 million euros, even as revenues were up 2 per cent, to 5.668 billion euros. Margins, according to the company, were boosted by higher volumes and the impact of cost cuts as part of a 2005 restructuring plan.

Thales helps make the French Rafale fighter, Franco-Italian FREMM frigates, tactical radios for the US Army and Britain's Watchkeeper surveillance programme using unmanned air vehicles.

The aerospace and space division posted an EBIT of 96 million euros, up 14 per cent. The division makes computer avionics for cockpits, in-flight entertainment for airliners and telecoms, military and weather satellites.