Elbit Systems records $60 million in write-offs due to Covid-19
The company had a tough quarter due to the reduced demand for aviation products, but still saw profits jump
13:1826.10.20
Elbit Systems Ltd. has reported reduced demand for its aviation products and services due to the significant slowdown in commercial air traffic. As a result, the Israeli developer of aerospace, land, and naval systems expects to record approximately $60 million in non-cash expenses related to the impairment of assets and inventory write-offs in the third quarter of 2020.
Bezalel (Muddy) Machlis, President and CEO of Elbit Systems. Photo: PR
The company, which is controlled by Mickey Federman and managed by Bezalel (Muddy) Machlis, noted that the aviation industry will take several years before it returns to levels seen before the coronavirus (Covid-19) pandemic. As such, manufacturers of aircraft for these markets have announced plans to reduce their production rates to adapt to this new, lower, demand.
Bezalel (Muddy) Machlis, President and CEO of Elbit Systems. Photo: PR
The $60 million expenses will be recorded mainly in the ‘cost of revenues’ line item in the Consolidated Statement of Income. They will be included in the financial results for the third quarter of 2020 which will be reported by the company in its press release, planned for November 2020.
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Its third-quarter results show a stark contrast to the results recorded in the second quarter, which saw practically no impact from Covid-19 and the early days of lockdowns. In fact, the company’s net profit jumped 65% in the 2020’s second quarter compared to the previous year, standing at $89.3 million.
