Patria Group, a Finnish defence company, released its third quarter (Q3) results on 27 October, revealing that its recent operations restructuring, in which 56 redundancies are planned, will increase net sales and operating profit.
Currently, Patria’s net sales for the last three quarters came to €487.9m ($515.2m), compared with €426.7m in the comparison period. Likewise, operating profit was €36.9m (compared with €32.8m).
“A major part of operational focus has been on building production capacity for the new vehicle orders,” the company stated in a press release.
“Some of the budgeted orders for the year were assigned later than planned, but this will not have a significant impact on the production or result of the entire year. The outlook for net sales and profitability for the rest of the year remains strong.”
GlobalData’s filings data tells us that the theme of ‘production capacity’ was mentioned 89 times in 2023. This has fallen from 124 mentions in 2022, 100 mentions in 2021 and 105 mentions in 2020.
Patria appears to be responding to the reduced consideration of production capacity at a time when supply chains are less secure and the demands across the defence industry continue to escalate following the Russian invasion of Ukraine.
F-35s and CAVS
The company is confident that its “reliable and cost-effective lifecycle support services and top-notch products have a key role in the future in maintaining required performance of customer fleets in all conditions.”
Following the Finnish Government’s decision to acquire F-35 fighter jets in December 2021, negotiations concerning industrial participation of the selected aircraft will continue during the rest of the year.
In June 2023, Patria and Lockheed Martin signed the first memorandum of agreement for direct work within Finland´s F-35 industrial participation programme, which covers the contractual framework for F-35 forward fuselage assemblies in Finland by Patria.
As well as this, the multinational joint Common Armoured Vehicle System (CAVS) programme of the Patria 6×6 vehicle is proceeding as planned. Sweden’s first batch of 6×6 vehicles – designated the ‘Pansarterrängbil 300’ by the customer – have just arrived.
The first deliveries of 91 vehicles that Finland ordered as well as the deliveries of vehicles to Sweden have begun. Germany has officially joined the programme by signing the Technical Arrangement. Serial production of more than 200 Latvian vehicles is ongoing. The joint programme has raised interest and is open for other countries to join following mutual consent from participating countries.
“The impact of long-term development of the current geopolitical situation, general economic uncertainty, inflation and increasing costs for the rest of the year are difficult to evaluate reliably. At the same time, Patria’s delivery capability is expected to stay at a good level,” the release emphasised.
In the mid and long term, Patria and the defence industry in general are likely to see an increase in demand as defence spending is increasing in the majority of European countries.
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