Editor’s note: Currency conversions within this article have been updated since it was originally published.
PARIS — French electronics company Thales reported on Wednesday a first-half net profit of €336 million (U.S. $392 million), which is down 12 percent from a year ago, reflecting last year’s gain from the sale of a stake in its joint venture with Raytheon.
With last year’s disposal of its stake in ThalesRaytheonSystems LLC to Raytheon, the company gained €92 million for the first half of 2016, Thales said. TRS LLC is the American unit of the TRS joint venture.
TRS developed and built NATO’s Air Command and Control System, linking national radar systems of alliance members to provide overall coverage.
Operating profit rose to €551 million, up 17 percent on a like-for-like basis, marking 8.8 percent of sales.
Turnover rose 5.9 percent to €7.2 billion. Sales in the defense and security segment rose 6.5 percent to €3.6 billion, with “steady growth” in missile electronics and protected vehicles, the company said.
Combat aircraft systems saw a “high level of activity,” the company said.
Thales is a major subcontractor on the Rafale fighter jet, notably supplying the radar and onboard electronics.
Orders rose 10 percent to €5.9 billion, with seven large orders booked in the second quarter compared to three a year ago. Large orders are worth more than €100 million, Thales said. The order book stood at €31.9 billion, an estimated two years worth of work.
Orders in mature markets rose 16 percent to €4.4 billion, helped by a 51 percent increase in France and a 42 percent gain in North America. Orders from emerging markets slipped 2 percent to €1.58 billion.
Among the large orders were Thales’ share of development and building five intermediate frigates for the French Navy, and building with partners Nexter and Renault Trucks Defense the first batch of 340 armored vehicles in the French Army’s Scorpion program, the company said.
There was also an order for Aeros reconnaissance pods to an undisclosed client, and systems and sensors for the navy of an emerging-market country, also undisclosed.
Secure communications and information systems saw a sales slow down, with a “positive dynamic” in military networks and infrastructure systems offset by falling sales in radio communication products.
Free operating cash flow jumped 380 percent to €216 million from €45 million, while net cash slipped by €72 million to €2.3 billion.
The 2017 operating profit was forecast to rise between 9 to 11 percent, between €1.48 billion and €1.5 billion, helped by continuing efforts to boost competitiveness.
Orders for 2017 were forecast to “remain brisk” at an estimated €14 billion, below record highs booked in 2016 and 2015.
Sales were forecast to see “mid-single digit organic growth” compared to 2016.
Thales reported 2016 sales of €14.9 billion.
