STOCKHOLM, April 22 (Reuters) - Swedish defense products
company Saab will boost capacity to meet rising
demand, it said on Friday after posting an increase in
first-quarter profit and strong order intake.
Shares in Saab have soared 65% this year as a growing number
of countries announce increased defense budgets as a result of
intensifying geopolitical tensions and the conflict in Ukraine.
Saab, maker of the Gripen fighter jet and a range of
military and civilian hardware, said it expects further supply
chain challenges across the industry and would work to mitigate
shortages and ensure delivery of components.
Shares in the company, which competes with U.S. defense
giant Lockheed Martin as well as Boeing, France's
Dassault and Britain's BAE Systems, were up
3.5% at 0847 GMT.
Russia's invasion of Ukraine, which Moscow calls a "special
military operation," has prompted many countries, including
Saab's home market Sweden, to boost defense budgets.
Sweden and its closest military ally, Finland, are also
considering whether to join NATO after decades of military
Saab CEO Micael Johansson said that potential NATO
membership for Sweden is a political question, but for the
company he finds it "hard to see something negative" were Sweden
"The market for our portfolio, I would say, generally grows
in the NATO countries, giving more opportunities," he told
Reuters, adding that competition would probably increase, too.
Saab posted first-quarter operating profit of 654 million
Swedish crowns ($68.8 million), up from 597 million a year
earlier. Order intake grew 38% to 8.1 billion crowns.
Investment bank Citi said it expects increases in defense
budgets to take some time to feed through to orders and sales,
adding that Saab is "well positioned to benefit" with its
relatively high exposure to missiles and surveillance.
Saab suffered a setback in December when Finland agreed a
$9.4 billion deal for 64 of Lockheed's F-35 fighters ahead of
the Swedish company's Gripen. Canada, meanwhile, has also chosen
the U.S. company as preferred bidder for new fighter aircraft.
Saab maintained its full-year forecast of 5% organic sales
growth and operating profit growth between 8% and 12%.
($1 = 9.5029 Swedish crowns)
(Reporting by Helena Soderpalm
Editing by David Goodman)