Rada put its faith in Military Tactical Radars
28 March, 2017
After a tough year of decline in sales, RADA Electronic Industries expect 40% YoY growth in 2017. All thanks to its novel ground Radar technology
At first glance, RADA Electronic Industries concluded a tough year: Revenues in 2016 totaled $12.8 million compared with revenues of $14.0 million in 2015. Gross profit totaled $1.4 million compared with gross profit of $2.4 million in 2015, and the company’s Operating loss reached $3.4 million in 2016, compared with operating loss of $2.7 million in 2015.
But all this did not prevent Rada to provide a very positive outlook for 2017: Two weeks ago it announced that “given its current backlog of orders in hand, for tactical radars and avionics, it expects significant revenue growth in 2017.” In numbers: RADA expects its full year 2017 revenues to grow to over $18 million from approximately $13 million in 2016. This is no less than 40% year over year growth.
Growth engine of 2017
RADA Electronic Industries Ltd. is an Israel-based defense electronics contractor. The Company started as an avionic expert, but recently it gains respect for its highly sophisticated Tactical Land Radar for force and border protection. “We plan to invest further in our growth engine, our software-defined tactical radars, where we currently see significant opportunities globally,” said Dov Sella, RADA’s Chief Executive Officer. This was backed by a prospectus to sell up to 4,351,568 ordinary shares of Rada, for aggregating amount of approximately $5.3 million, published yesterday.
Rada believes that after a long time (the company was established 30 years ago), it has the right product for the right market in the right time: A Compact Hemispheric Radar (CHR), perfectly adapted to the growing market of Active Protection Systems (APS) on armored vehicles. The APS provides armored vehicles the needed protection against rocket-propelled grenades (RPG), anti-tank guided missiles (ATGM) and tank shells.
The heart of the APS system is a search and track radar, with the ability to detect threats and enable interception before a threat strikes the vehicle. The addressable APS market in the Western World is estimated at the tens of thousands of vehicles. According to Rada, it means multi-billion dollar market potential for tactical radars capable to perform such functions.
Field tested systems
Rada’s CHR platform was developed to address exactly those the needs. This is an S-band, software-defined, pulse-Doppler, active electronically scanned array radar. The radar system introduces sophisticated beam forming capabilities and advanced signal processing, which can provide various missions on each radar platform. The CHR is incorporated into IMI Systems’ Iron Fist family of APS, and has undergone hundreds of live fire tests. Recently RADA delivered CHRs to Artis, to be integrated and tested with its Iron Curtain close-in APS.
This may prove to be a good assumption: In December 2016, BAE Systems, announced it has received a contract from the Netherlands for supplying its CV90 combat vehicles with active protection systems. BAE will install the Iron Fist of IMI, a field proven system – already integrated into many of the IDFs “Namer” APCs, based on the renowned Israeli “Merkava” tank.