STOCKHOLM, April 26 (Reuters) - Swedish defence equipment maker Saab's Q1 results beat forecasts as countries continued to stock up on surveillance gear and weapons because of the war in Ukraine.
Order intake at the company that makes a range of military and civilian hardware doubled to 17.02 billion crowns ($1.66 billion) from 8.1 billion, while its order backlog increased to 132.66 billion crowns from 128 billion crowns.
Saab, which competes with U.S. defence giant Lockheed Martin, France's Dassault and Britain's BAE Systems, has seen strong demand for its products over the past year as the war raised geopolitical tensions, leading many nations to ramp-up military spending.
Chief executive Micael Johansson said countries are increasing stocks to improve their own resilience, as well as to support Ukraine, which had translated into a strong order intake.
The first quarter was boosted by one order worth 8 billion crowns from the government of a Western country for a Carl-Gustaf multi-purpose shoulder launched weapon and an RBS 70 NG short-range air defence system.
Demand has been particularly strong in the surveillance and dynamics businesses, which include sensors, deterrents, support weapons and missiles, he said.
"It's mainly Europe and the U.S. we see taking that responsibility," Johansson said, adding that European countries also have depleted stocks that need to be replenished.
"I think this will be quite long term because we are still in the beginning of this growth on creating a higher capability level, including Sweden...So we need to support that by increasing our capacities along with the market," the CEO said.
Analysts at Citi said it was a strong start to the year for Saab, with sales, operating profit and orders beating consensus.
Shares in Saab were up around 4.5% as the market opened, but reversed course later and at 0806 GMT were down 1.5%.
Operating profit for the maker of the Gripen fighter jet was 928 million Swedish crowns ($90.16 million) in the quarter, compared with 654 million crowns a year earlier.
The company maintained that it expected organic sales growth in 2023 to be around 15%, but that growth in the remaining quarters of the year is likely to slow from the strong first quarter.
Reporting by Marie Mannes, editing by Terje Solsvik
Source: Reuters