The war that broke out in Israel last year is just one arena of geopolitical conflict around the world in recent years. Before October 7, of course, there was the start of the war between Russia and Ukraine, as well as growing concerns in East Asia about China’s growing power. As a result, many countries are increasing their defense budgets, and defense companies are taking advantage of the increased demand by developing solutions and products to meet changing needs. A recent defense industry survey by analysts at the investment bank Oppenheimer noted that geopolitical, technological and military changes around the world are the most significant and rapid in the past 85 years.
Oppenheimer says countries like China, Russia, Iran and North Korea are recognizing opportunities to change the global order. The investment bank sees this change as structural, and if the United States and its allies want to remain the world’s dominant power, they will have to invest enormous resources in technology to enhance their military advantage.
Israeli defense companies listed on the Tel Aviv Stock Exchange have benefited from this trend, and financial reports they have published in recent weeks reveal $1 billion in new contracts in Israel and abroad. Some of these companies operate in various sectors of the defense industry, and have enjoyed a long-term boom in business.
Elbit Systems Ltd. (NASDAQ: ESLT; level:ESLT)
$930 million in new contracts
Elbit Systems is Israel’s largest defense company listed on the Tel Aviv Stock Exchange. The company develops and produces defense systems and weapons for use at sea, in the air and on land, and has enjoyed record orders over the past year, including over the summer. In late July, Elbit announced a $190 million contract to supply Iron Sting precision-guided mortar munitions to the Israeli Ministry of Defense, followed by a $340 million contract to supply the munitions to the Defense Ministry. Contracts have also been signed with overseas customers: a $270 million deal to supply rocket artillery and a $130 million deal to supply Iron Vest defense systems to a European country.
Despite Elbit’s unprecedented order backlog, the company’s share price has risen slightly this year due to pressure on investors to sell shares from anti-Israel organizations, as well as relatively low cash flows that do not reflect the surge in orders. Elbit’s market value is currently $9.1 billion.
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$84.5 million in satellite services and analytics deals
The Yehud-based satellite services company has signed two massive contracts in recent weeks: The company announced it will provide a client in Asia with two satellites and related products and services, for $30 million over three years. In July, the company announced a $54.5 million service contract for satellite intelligence-based analytics. ImageSat’s stock is up 6.5% over the past year and has a market cap of NIS 784 million.
Ashkelon Industries Ltd. (level:Let’s say)
$23.5 million order for manufacturing and supply of components
Ashot manufactures jet engine shafts, transmissions, gears and gearboxes, landing gear components and tungsten products for the aerospace and defense industries including armored vehicles and tanks such as the Merkava and Namer. Founded in 1967, the company has 440 employees in Israel and the United States, and its customers include major aircraft manufacturers.
In August, the company announced that it had received new orders from the Defense Ministry for the production and supply of spare parts and the renewal of systems worth NIS 86.4 million ($23.5 million at the current exchange rate), to be delivered over a two-year period. The company said that the pace of new orders from the Defense Ministry had increased significantly due to the war, including for products that had not been ordered from it before. The war has boosted Ashot Ashkelon’s standing, with its share price rising 101% over the past year, giving it a market value of NIS 816 million.
ARYT Industries (TASE: ARYT)
$218 million to supply valves
Aret Industries, based in Sderot on the Gaza border, has been receiving large orders throughout the year and makes drones and military electronics. In August, it received an order from the Defense Ministry to supply valves worth NIS 80 million ($21.8 million at the current exchange rate) by 2025. The company, which is due to this and previous orders from the Defense Ministry, is expanding its production lines and workforce. Aret is one of the best performing stocks over the past year on the Tel Aviv Stock Exchange, with a 134% return, boosting its market value to NIS 465 million.
Emco Industries (TASE: IMCO)
$7 million contract for subsidiary
IMCO has been one of the most prominent stocks on the Tel Aviv Stock Exchange over the past year, with its share price rising 176%. The Haifa-based company manufactures electronic, mechanical and electromechanical products for military use and is traded at a market value of NIS 134 million. Its US subsidiary recently received a new order worth $7 million to manufacture and supply components for an American defense company for delivery between 2025 and 2027.
Orbit Technologies (TASE: blind)
$6 Million Contract for Supply of Satellite Communications Systems
Netanya-based Orbit Technologies provides communications and voice management services for airborne systems, airborne and maritime satellite communications terminals. Last month, Orbit announced a $6 million order for satellite communications systems for new naval military platforms. The orders came from an integrated company in Asia and are due for delivery between 2025 and 2030. After a 16.2% rise in its share price over the past year, Orbit is trading at a market cap of NIS 586 million.
printed circuit board technologies (Level: PCB)
$6 million contract for Israeli client
Two weeks ago, PCB Technologies announced an order to supply printed circuit boards to be assembled as part of a security project for a defense industry client in Israel. The contract is worth $5.6 million. This week, the company announced a follow-up order worth $7.4 million to supply electronic equipment products and printed circuit boards for a defense project in Israel. With reported contracts totaling $49 million since the beginning of the year, PCB’s share price has jumped nearly 92% in the past year, giving it a market value of NIS 398 million.
NextVision Stable Systems (Level: NXSN)
$1.1 million for custom installation cameras
The Raanana-based company develops and manufactures day and night stabilization cameras, which are primarily used for drones. Its solution helps stabilize the image even in difficult flight conditions. The company’s clients are in the defense sector, but it also has commercial customers. Its clients include the Ministry of Defense, Elbit Systems and Israel Aerospace Industries. Last month, the company announced a $1.1 million order for cameras and other products for delivery this year. NextVision’s stock has risen 114% over the past year, giving it a market value of NIS 3.8 billion.
This article was published in Globes, Israeli Business News – en.globes.co.il – on September 5, 2024.
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