Signal: perspectives on operational efficiency measures of Patras

Fatherland Group, a Finnish defense company, published its third quarter (Q3) results. on Oct. 27, revealing that its recent restructuring of operations, in which 56 layoffs are planned, will increase net sales and operating profit.

Currently, Patria’s net sales for the past three quarters amounted to 487.9 million euros ($515.2 million), compared to 426.7 million euros in the comparative period. Likewise, operating profit was €36.9 million (vs. €32.8 million).

“A significant part of the operational focus has been on building capacity for new vehicle orders,” the company said in a Press release.

“Some of the budgeted orders for the year were awarded later than planned, but this will not have a significant impact on production or the full year result. The outlook for net sales and profitability for the rest of the year remains strong.”

GlobalData’s archived data tells us that the topic of ‘manufacturing capacity’ was mentioned 89 times in 2023. This is down from 124 mentions in 2022, 100 mentions in 2021 and 105 mentions in 2020.

Patras appears to be responding to the lowered estimate of production capacity at a time when supply chains are less secure and demands on the entire defense industry continue to escalate following the Russian invasion of Ukraine.

F-35 and CAVS

The company is confident that “its reliable and cost-effective lifecycle support services and leading products play a key role in the future in maintaining the required performance of customer fleets in all conditions.”

Following the Finnish government’s decision to acquire F-35 fighter jets in December 2021, negotiations on the industrial participation of the selected aircraft will continue during the rest of the year.

In June 2023, Patria and Lockheed Martin signed the first memorandum of understanding for direct work under Finland’s F-35 industrial participation program covering the contractual framework for F-35 forward fuselage assemblies in Finland from Patria.

Apart from this, the Patria 6×6 Multinational Joint Armored Vehicle System (CAVS) program is progressing as planned. Sweden’s first batch of 6×6 vehicles – named “Pansarterrängbil 300” by the customer – have just arrived.

First deliveries of 91 vehicles ordered by Finland as well as vehicle deliveries to Sweden have begun. Germany officially joined the program by signing the Technical Arrangement. Serial production of more than 200 Latvian vehicles is underway. The joint program has increased interest and is open to other countries to participate upon mutual consent of the participating countries.

“The long-term development impact of the current geopolitical situation, general economic uncertainty, inflation and rising costs for the remainder of the year is difficult to assess reliably. At the same time, Patria’s delivery capacity is expected to remain at a good level,” the announcement emphasizes.

In the medium and long term, Patras and the defense industry in general are likely to see an increase in demand as defense spending increases in the majority of European countries.

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