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Saab shares dive despite strong 2011 report

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Saab shares dive despite strong 2011 report
15:29 CET+01:00
Swedish defence and aerospace group Saab reported Friday a five-fold increase in its 2011 earnings after clinching several major contracts and said it hoped to increase sales this year.

"2011 was an important year for us and we secured several key orders, such as further development and maintenance orders for the Gripen (fighter) from (Sweden) ... and for our multi-mission radar system Giraffe from the US," chief executive Håkan Buskhe said in a statement.

"I am also proud of the strong recognition Gripen received when the Swiss government ... selected it" as the preferred bidder, he said.

The Swiss government is expected to formally approve the choice of the Gripen multi-role fighter in February.

In November, Bern announced it would buy 22 Gripen fighters to replace its ageing F5 fighter fleet for an estimated 3.1 billion francs ($3.38 billion).

But amid pressure from other rival suppliers still eager to win the deal, Saab, according to unconfirmed press reports, is ready to review its price down to perhaps 2.5-2.8 billion francs.

In 2011, Saab posted a net profit of 2.23 billion kronor ($333.8 million), up from 433 million in 2010. In the fourth quarter alone, profit rose 52-fold to 413 million kronor from 8.0 million kronor.

Sales fell 4.0 percent in 2011 to 23.50 billion kronor and were down 9.0 percent in the fourth quarter to 7.35 billion kronor.

"For 2012, we estimate that sales will increase slightly compared to 2011," Buskhe said.

Orders however were lower in the second half of the year as "a consequence of continuous delays in customers' decision making processes."

Orders fell 28 percent in 2011 to 18.91 billion kronor giving an order book at the end of the year worth 37.17 billion kronor, down 10 percent from 2010.

That news worried investors and Saab's share price slumped 9.3 percent in afternoon trade on a Stockholm market down just 1.25 percent.

Saab AB, whose star product is the JAS Gripen fighter, has for more than 30 years been a separate company from the now-bankrupt carmaker Saab Automobile.

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