Profits down at Saab

Swedish aviation and defence group Saab said on Tuesday first-quarter pre-tax profit fell sharply on increased marketing, administration, research and defence costs arising partly from acquisitions.

Pre-tax profit fell to 380 million kronor ($56 million) from 533 million a year earlier.

“Saab began 2007 solidly. Order bookings and sales increased compared with the same period last year,” group chief Åke Svensson told reporters.

The equivalent figure last year included 185 million kronor in extraordinary income, mostly from capital gains, versus 40 million in this quarter results, it said.

Market expectations were for a pre-tax profit of 404 million kronor, according to SME Direkt.

However sales rose to 4.917 billion kronor from 4.311 billion kronor. Orders booked rose to 5.391 billion kronor from 4.149 billion last year.

Saab said that of total order bookings, 72 percent was attributable to markets outside of Sweden. The order backlog now stands at 51.4 billion kronor.

Commenting on the allegations that bribery was used to help sell its Gripen fighter, Saab said the company had never permitted bribery and that it was fully cooperating with the public prosecutor’s investigation.

Saab reiterated that for 2007, it expects growth in line with 2006, with an operating margin – including structural costs – slightly higher than in 2006.