Defence manufacturer Saab to boost capacity as profit climbs

FILE PHOTO: The Swedish Saab JAS 39 Gripen fighter jet performs during the Dubai Air Show in Dubai

STOCKHOLM (Reuters) -Swedish defence products company Saab will boost capacity to meet rising demand, it said on Friday after posting an increase in first-quarter profit and strong order intake.

Shares in Saab have soared 65% this year as a growing number of countries announce increased defence budgets as a result of intensifying geopolitical tensions and the conflict in Ukraine.

Saab, maker of the Gripen fighter jet and a range of military and civilian hardware, said that quarterly order intake grew 38% to 8.1 billion crowns.

The company added that it expects further supply chain challenges across the industry and would work to mitigate shortages and ensure delivery of components.

“To meet a further demand, we will also steadily increase capacity,” CEO Micael Johansson said in a statement.

Saab posted first-quarter operating profit of 654 million Swedish crowns ($68.8 million), up from 597 million a year earlier.

The company maintained its full-year forecast of 5% organic sales growth and operating profit growth between 8% and 12%.

($1 = 9.5029 Swedish crowns)

(Reporting by Helena SoderpalmEditing by David Goodman)