The Israeli defence industry is experiencing an unprecedented financial boom, with major firms announcing record revenues for the first half of 2024. This surge is directly linked to a significant increase in global military exports, fuelled by rising geopolitical tensions and conflicts worldwide.
Financial Milestones for Key Defence Contractors
Leading the charge is Rafael Advanced Defense Systems, a state-owned defence giant. The company reported a staggering first-half revenue of 14.2 billion shekels (approximately $3.8 billion). This figure represents a dramatic 40% increase compared to the same period in the previous year. Rafael's net profit also saw a substantial rise, climbing by 32% to reach 1.2 billion shekels.
Another major player, the publicly traded Elbit Systems, mirrored this success. Elbit posted a record revenue of $3.5 billion for the first six months of 2024, marking a 13% year-on-year growth. The company's order backlog, a key indicator of future revenue, swelled to an impressive $18.9 billion, providing strong visibility for continued growth.
Drivers of the Defence Export Surge
Industry analysts and company executives point to a confluence of global factors behind this remarkable performance. The ongoing war in Ukraine has created a sustained demand for advanced weaponry, air defence systems, and intelligence-gathering technology. Furthermore, heightened tensions in other regions, including the Middle East and Asia, have prompted numerous nations to bolster their military capabilities.
Rafael's CEO, Yoav Har-Even, explicitly connected the financial results to the "global operational reality," indicating that conflicts are driving procurement. The company's diverse portfolio, which includes the famed Iron Dome air defence system, the Spyder surface-to-air missile system, and the Spike family of anti-tank guided missiles, is in high demand. Similarly, Elbit's strengths in areas like drone technology, electronic warfare, and command-and-control systems are seeing increased orders.
Implications and Future Outlook
The record revenues solidify Israel's position as one of the world's top defence exporters. The financial windfall provides these companies with increased capital for research and development (R&D), potentially leading to next-generation military technologies. This cycle of sales funding innovation could further entrench their market position.
However, this boom also raises important geopolitical and ethical questions. The proliferation of advanced arms to various conflict zones is a subject of intense international debate. The performance of these firms is inextricably linked to global instability, presenting a paradox where security for some nations translates from insecurity elsewhere.
Looking ahead, the robust order backlogs at both Rafael and Elbit suggest that the record-breaking trend is likely to continue through the remainder of 2024 and into 2025. As long as geopolitical friction remains high, the Israeli defence industry is poised for sustained growth, making it a critical and influential segment of the global arms market.
