Bet Shemesh Engines Holdings (1997) (BSEN) Q3 2024 earnings summary

Executive summary

• Revenue for the nine months ended September 30, 2024, reached $192.8M, up 28% year-over-year, with net income of $59.95M, a 17% net margin.

• Growth driven by both engine manufacturing and parts segments, with improved profitability and operational efficiency.

• No material impact from the ongoing Israel conflict as of report date, though future effects remain uncertain.

• Significant new and extended contracts, including a $205M long-term agreement with Pratt & Whitney and a $64M expanded maintenance deal with a European government client.

• Acquisition of 80% of Turbine Standard Ltd. in the US for $33.3M to expand MRO capabilities.

Financial highlights

• Q3 2024 revenue was $67.7M, up 27% from Q3 2023; gross profit margin rose to 26.1% from 17.0%.

• Q3 2024 net income was $10.39M, up from $8.95M in Q3 2023; EBITDA margin (excluding real estate) was 25.2%.

• For the nine months, operating income before real estate was $34.7M (18% margin), up from $14.9M (9.9%) in 2023.

• Cash flow from operations for the nine months was $18.6M, up from $8.3M in 2023.

• Net financial debt reduced to $36.3M from $55.5M a year earlier.

Outlook and guidance

• Management expects continued growth in both segments, supported by strong order backlog of $1.75B spanning up to 20 years.

• Ongoing recovery in civil aviation and robust demand in defense markets expected to drive further expansion.

• Company monitors supply chain challenges and geopolitical risks, which may moderate growth pace.