Defence Demand Pushes Thales Orders, Sales Higher In Q1

France’s Thales reported strong first-quarter orders and sales led by its defence business as global tensions spur demand for air defences but predicted growth would stabilise in the second half as it reaffirmed forecasts for the year.

Europe’s largest defence electronics company said that orders jumped 46 per cent to USD 5.4 billion, buoyed by a third tranche of Rafale fighters for Indonesia, for which it makes the radar and an air surveillance system for an unnamed Middle East nation.

Revenues rose by an underlying 7.9 per cent to USD 4.74 billion in part due to a favourable basis of comparison in defence and security which grew 13 per cent.

“In the second half, (growth) will doubtless normalise,” Chief Financial Officer Pascal Bouchiat told reporters.

On average, analysts were expecting quarterly orders of USD 3.91 billion and sales of USD 4.6 billion, according to a company-compiled survey.

For the full year, Thales is projecting like-for-like sales growth of between 4 and 6 per cent to reach USD 21 billion, as well as orders coming in at a level exceeding sales.

Orders in the first quarter were also lifted by the second tranche of a contract signed last year for the production of 400 Franco-Italian ASTER surface-to-air missiles.

France last month announced a package of aid for Ukraine including a new batch of Aster 30 surface-to-air missiles for the SAMP/T system provided to Kyiv. The Aster 30 can intercept warplanes, drones and cruise missiles within a range of 120 km.

France has urged the MBDA-led consortium that developed the missiles, of which Thales owns a third, to speed up production to help Ukraine and has indicated it will use its powers to force suppliers to put military needs before civil contracts.

Thales makes the “autodirectors,” an infra-red or electro-magnetic system that guides and then detonates the missiles.

Production of such systems relies on the availability of circuit boards from specialist French suppliers, amid wider global shortages of basic electronic components.

“That can be a limiting factor,” Bouchiat said, adding that disruption in the broader aerospace supply chain was “not completely resolved”.