Swedish defense firm Saab’s order backlog hits record $33B on surging defense demand

Swedish defense company Saab reported record orders in the second quarter as countries continued to increase spending on military readiness and long-term defense capabilities.

Order bookings totaled 68.4 billion Swedish kronor ($7.1 billion) in the April-June period, up 141% from a year earlier, according to the company's financial statement released Friday.

The increase was driven by a $4.9 billion contract to supply Poland with three A26 submarines, Saab's largest export order to date. The agreement also includes weapons, training and support packages.

Saab's order backlog reached a record $33 billion at the end of June, up 61% from $20.5 billion a year earlier. International markets accounted for 76% of the backlog.

Sales rose 28.6% year-on-year to $2.6 billion, while organic sales growth reached 29.8%, supported by higher delivery volumes and strong project execution.

Operating profit (EBIT) increased 41% to $290 million, with the operating margin improving to 11% from 10%. Net income also rose 41% to nearly $228 million.

"Demand for our product offering remains high as customers invest in both immediate and long-term needs," President and CEO Micael Johansson said.

Saab's aeronautics division posted 31% sales growth as the company expanded Gripen fighter jet production and delivered aircraft to Sweden and Hungary.

The Dynamics division, which produces missile systems and other weapons, recorded 36% sales growth, while the Surveillance division reported a 47% increase. Sales in the Naval division rose 9%.

Saab said it is expanding production capacity for surface sensors, GlobalEye airborne surveillance aircraft and submarines at its facilities in Sweden.

The company also signed a contract during the quarter for 16 Gripen E fighter jets for Ukraine, but said the $2.55 billion order will be recorded in the third quarter.

After the reporting period, NATO selected Saab for negotiations on the potential acquisition of up to 10 GlobalEye airborne early warning and control aircraft.