By Giulia Segreti
ROME (Reuters) - The Italian unit of European missile maker MBDA expects the number of new contracts and revenue to slip this year after seeing record high orders in 2023, its managing director said on Friday.
MBDA's Italian order portfolio last year rose by just over 40% to 4.5 billion euros ($4.87 billion). New contracts almost doubled, for the second year in a row, to 2.3 billion euros from 1.18 billion euros the previous year, according to a presentation slide.
"This year we expect order volumes and revenues to be slightly below the levels of 2023 - hard to repeat given the record highs - but to still be significant," Italy's Managing Director Giovanni Soccodato said.
As world geopolitical tensions rise, global military spending is surging and the market for missiles and missile defence systems are forecast to grow.
"Looking ahead, from the solid base that has been created, it is extremely meaningful to prepare the future," Soccodato told reporters, explaining that although contracts this year would not be as significant in terms of numbers they would concern products that would be key for the company's future development.
The group is owned by France's Airbus and Britain's BAE Systems (LON:BAES), both with a 37.5% stake, and by Italy's Leonardo, with the remaining 25%.
It has been frequently cited as a successful example to follow as more pan-European alliances in the defence sector are needed to take full advantage of military budgets in a more efficient and less fragmented way.
Earlier this month, MBDA reported that the consortium as a whole generated revenue of 4.5 billion euros in 2023, with new orders rising to 9.9 billion euros. The company's total order portfolio is now worth 28 billion euros.
Soccodato said containing costs was particularly important at a time when traditional players like MBDA face aggressive competition from new players from countries such as South Korea and Turkey.
($1 = 0.9245 euros)