RAFAEL the Armament Development Authority, ended the first half of 2004 with a net income of $33 million.

The Board of Directors of Rafael approved the results of the company for the first half of 2004, which amounted, as mentioned, to a net income of $33 million, compared to an income of $17million in the first half of 2003.

The orders backlog for the first half of 2004, amounted to $472 million, compared to $271 million for the first half of 2003. Sales in the first half of 2004 amounted to $356 million, compared to $394 million in the first half of 2003.

During the first half of 2004, Rafael continued to expand the cooperation with local companies in Europe and in the U.S.A., with the purpose of promoting and marketing its products, and possibly utilizing the American Aid funds.

Giora Shalgi, Rafael's CEO, said that Rafael is positioned at a crossroad that will lead to the realization of an export orientated growth strategy, despite reduced demand of the local defense system.
The growth strategy is based on a wide range of innovative products and cooperation agreements with local companies, focusing mainly on Europe and the U.S.A. as primary customers.

Jacob Toren, Chairman of the Board of Directors said that the good results of the company for the first half of 2004 were attained despite the difficulties and the uncertainty of the defense budget, thanks to the marketing activity, the correct financial policy and the cost reduction steps taken by the company. Yet, Toren added, the fierce competition in the global defense market does not allow us to relax and obliges us to continue the search for ways to realize the high marketing potential of Rafael Products.
 

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RAFAEL public affairs. Tel: 972-4-8791244