Saab Proposes SEK6 Billion Rights Issue, Swings to 3Q Net Loss
October 23 2018 - 1:27AM
Dow Jones News
By Dominic Chopping
STOCKHOLM--Saab AB (SAAB-B.SK) announced plans on Tuesday to
launch a 6 billion Swedish kronor ($665 million) rights issue to
bolster its ability to compete for large orders, as it swung to a
third quarter net loss.
"Large orders...imply initially increased investments in
production and working capital, and at the same time the rapid
technology development entails continued investments in research
and development," the company said.
"Saab therefore needs a strong financial position to create room
for continued growth."
To support its continued growth and to allow it to successfully
compete for large orders, Saab said it plans to launch the rights
issue during the fourth quarter.
Investor AB (INVE-B.SK) and the Knut and Alice Wallenberg
Foundation, as well as other shareholders, together representing
52.3% of the share capital and 58.9% of the votes, have expressed
their support for the rights issue.
Saab posted a net loss for the quarter of SEK94 million from a
profit of SEK233 million, compared with analysts' expectations for
a profit of SEK305 million according to a FactSet poll. Sales rose
to SEK6.42 billion from SEK6.16 billion, compared with a forecast
of SEK6.72 billion.
The Swedish defense company said that order bookings in the
quarter totaled SEK4.52 billion from SEK3.7 billion in the same
period last year, while the order backlog stood at SEK102.4 billion
compared with SEK110.12 billion.
The gross margin fell to 22.4% from 25.3% with a negative
operating margin of 1.0% from a positive margin of 6.0%.
Operational cash flow amounted to negative SEK5.2 billion in the
third quarter from negative SEK758 million, due to timing
differences of milestone payments in large projects. Saab said the
main reason for the negative cash flow was the high level of
capital employed within the Gripen fighter jet business and
utilization of previously received advances and milestone
payments.
The company still sees 2018 sales growth in line with Saab's
long-term goal of 5% annual organic growth. The operating margin in
2018, excluding material non-recurring items, is expected to
improve from 2017, it said.
-Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter:
@domchopping @WSJNordics
(END) Dow Jones Newswires
October 23, 2018 02:12 ET (06:12 GMT)
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