By Johan Ahlander
STOCKHOLM (Reuters) -Swedish defence group Saab can meet demand for its Gripen fighter jets even if a landmark deal for up to 150 planes to Ukraine becomes reality, the defence group’s CEO said on Friday.
Sweden this week signed a long-term cooperation agreement with Ukraine over air defences that includes the possibility of exporting 100 to 150 new Gripen E in what would be Sweden’s biggest aircraft export order yet.
Saab CEO Micael Johansson said the company was already increasing production and could soon build between 20 and 30 planes per year, but would have to double that if the Ukraine deal is confirmed. He did not say what current output is.
“It’s absolutely no impossibility to dramatically increase the pace if we need to,” he told Reuters after Saab presented its third-quarter results, adding no order contract had been signed.
Shares in Saab rose 6.5% in early trade on Friday, extending the year-to-date gains to 124% as the war in Ukraine and increased NATO spending has boosted defence stocks.
Johansson said Saab would explore producing Gripens at new sites beyond the existing ones in Sweden and Brazil.
He also said he hoped to have partnerships with the industry in Ukraine, and possibly elsewhere in Europe or in Canada to expand production.
Saab has not said what a deal with Ukraine would be worth but in the third quarter it sold four Gripen aircraft to Thailand in an order valued at 5.3 billion Swedish crowns.
Gripen is a fourth-generation light single-engine supersonic fighter jet. It has been in commission since 1996 and has been upgraded several times. Industry analysts say it is a solid, low-cost alternative to the more expensive fifth-generation planes, such as the F-35.
SALES FORECAST UP ON INCREASED MILITARY SPENDING
Saab, whose products include missiles, advanced electronics and submarines, raised its like-for-like full-year sales growth forecast to 20-24%, even as order intake shrank slightly in the quarter. Its previous forecast, from July, was for 16-20% growth.
“We have a nice order backlog and deliveries are going well and our profitability continues to develop in the right direction,” Johansson said, adding that Saab took in orders worth 16 billion crowns after the close of the third quarter.
Already in the quarter, bookings were 20.9 billion crowns and the order backlog was 202.4 billion.
Operating profit at the Gripen fighter jet maker rose 16% from a year earlier to 1.37 billion crowns ($145.5 million) against a mean forecast of 1.38 billion in an LSEG poll of analysts, on organic sales growth of 18%.
($1 = 9.4155 Swedish crowns)
(Reporting by Johan Ahlander, editing by Anna Ringstrom and Barbara Lewis)
