Aerospace & Defense

Thales' shares climb after French company raises 2021 sales goal

2 minute read

The logo of French defence and electronics group Thales is seen at the company's headquarters in Merignac near Bordeaux, France, March 22, 2019. REUTERS/Regis Duvignau

PARIS, July 23 (Reuters) - France's Thales (TCFP.PA) raised its full-year revenue target after posting first-half revenues up by 9.8% on a like-for-like basis, helping to lift the company's share price.

Europe's largest defence electronics company, whose systems range from radar to rail, and biometric sensors to satellites, said the increase reflected a broad rebound compared with the worst stages of the pandemic, except for civil aerospace.

New orders rose 37% to 8.244 billion euros ($9.70 billion), led by major satellite contracts in Europe and Indonesia.

Chief Executive Patrice Caine said the order boost lent confidence, while warning the business climate "continues to be disrupted."

Thales' overall operating income more than doubled to 768 million euros in the first half from 348 million a year earlier, as half-yearly sales reached 8.423 billion euros.

Thales now expects 2021 sales of 17.5-18.0 billion euros, compared with a previous target of 17.1-17.9 billion.

Thales's shares were up 1.4% in early session trading.

Thales' new sales outlook assumes no major new economic or public-health disruptions and a return to normal in the global semiconductor supply chain, the company said.

In May, it said it had seen no significant impact from a global shortage of chips used by its identity and bank payments businesses, but was adding new suppliers.

Caine declined comment on speculation surrounding the potential sale of the company's rail signalling business.

Reuters reported this month that Thales had shortlisted Japan's Hitachi Rail (6501.T), Switzerland's Stadler Rail (SRAIL.S) and Spain's CAF for the business, which analysts have valued between 1.5 billion and 2.5 billion euros.

The French aerospace group, partially owned by the French state, is seeking to streamline its operations after investors often questioned the diversity of its portfolio.

($1 = 0.8498 euros)

Reporting by Tim Hepher; Editing by Sudip Kar-Gupta

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