Defence firm Saab returns to profitability

Defence firm Saab returns to profitability
Loss-making Saab Automobile in Sweden, solely owned by General Motors, is best known for its mid-range cars, and has been up for sale. The prospective buyer is Spyker Cars in Holland, producer of tailored luxury cars.

But Saab is a split constellation. The separate Saab military products company, best known for fighter jets, is 100 percent controlled by other financial interests.

The company posted a pretax profit of 461 million kronor ($65 million) in the final quarter of last year, with annual sales of 23 billion kronor, it announced at the weekend. Saab posted a 1 billion kronor loss for the equivalent period in 2008.

The actual quarterly profit was less than expected by markets, and saw the shares dip at the weekend by 13.5 percent. Even so, the company said it would sharply increase dividends to shareholders.

Saab is best known in the financial world for military products rather than cars. The biggest single shareholder is BAE Systems in Britain, global supplier of military products. Another major shareholder is Investor owned by Sweden’s influential Wallenberg family.

Saab was not the only Swedish company posting profits at the weekend. The mining and mineral company Boliden announced profits of 1.1 billion kronor in the final quarter of last year, on annual sales of 8.3 billion during the year. The company proposed a 300 percent dividend increase, from one krona to three per share.

Despite the deep recession, the Swedish Central Bank (Riksbanken) on Friday posted profits of 5.8 billion kronor in 2009 that it said would be dispatched to the government. This was probably welcome news. In addition to offering a guaranteed loan of 5.5 billion kronor to Saab Automobile, the government was expected to shortly hand over around 1 billion kronor to ailing Scandinavian Airlines Systems (SAS) in which it owns 21.4 percent of shares. A few months ago the Government granted a similar sum to SAS.

The airline is jointly owned by the governments of Sweden, Denmark and Norway, along with private interests.

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