Competition for employees vis-à-vis high-tech companies led to a 27.7% decline in Elbit Systems' net profit

Competition for employees vis-à-vis high-tech companies and the effort to preserve existing manpower led to a 27.7% decline in Elbit Systems' net profit in the first quarter of 2022. The company's net profit plunged to $ 52.8 million, compared to $ 72.5 million in the same quarter last year. In Tel Aviv by about 7%.
This, after Elbit set aside $ 32 million to finance the "Phantom" options, which allow for a cash payment of the difference between the share price and the pre-determined exercise price, which it gave to hundreds of employees last year.
The decline in profitability joins a stagnation in the order backlog, which stands at $ 13.7 billion, which led to the IAI (competing IAI) having a larger backlog of orders, worth $ 14 billion.
IAI, which as a government company is barred from distributing options to employees, earned $ 78 million in the same quarter this year, and rarely overtook Elbit in this section as well.
However, in sales, Elbit continues to lead, with a 21% increase to $ 1.35 billion in the first quarter of this year, compared to IAI's 1.2 billion. However, Elbit recorded a 16% increase in gross profit, to $ 326.9 million.
Elbit CEO Bezalel (Muddy) Machlis told Ynet that "without the payment to employees intended to compensate for the increase in Elbit's share, we would have recorded an increase in profit. We are happy to pay employees and share with them the success of the company. There is a bit of a cooling off in the competition from the high-tech side, but it is too early to see where things are going. "
As for the claim that the results do not reflect the high expectations of investors in the shadow of the war in Ukraine, Makhlis claimed that "we recorded a 21% increase in revenues, plus a relatively low dollar exchange rate that has risen since. "We have seen an increase in sales, mainly in Asia and Europe, and there is a strong demand for our systems."
Return to routine after the peak of the corona plague, which is reflected in Elbit's return to full marketing activity abroad, was reflected in a 68% increase in marketing and sales expenses to $ 87 million compared to January 2021, in the days of the fourth wave, and of 32% in management expenses and general expenses to 84.3 million dollar.