UAE’s Edge expects substantial revenue growth as global tensions rise

The defence conglomerate to continue boosting its portfolio through new acquisitions, chief executive says

Abu Dhabi, United Arab Emirates, February 21, 2021.  Idex 2021.  Social distancing is a must on day 1 of IDEX.
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UAE defence conglomerate Edge expects higher demand for its products in the wake of geopolitical tensions, with double-digit percentage growth in revenue forecast in the next two years amid the signing of new contracts and acquisitions.

The group, with more than 25 companies under its umbrella, specialises in manufacturing different defence products including drones, military vehicles, combat pistols, submachine guns as well as sophisticated missile systems for UAE armed forces and for export in global markets.

It has been recording $5 billion in revenue every year and expects the same level or slightly higher this year, with plans to grow the revenue to a much higher level in the next two years.

“Around 2026, I would say maybe a two-digit percentage increase. Between this year or next year, we are still fulfilling the contracts that we have in the past,” Hamad Al Marar, Edge group managing director and chief executive told The National.

The Abu Dhabi-based company currently exports 20 per cent of its products to different markets across the globe from Africa to Latin America with UAE armed forces being its largest domestic customer, supplying 80 per cent of its products.

It has been exporting ammunition as well as rifles, drones and other weapons to different markets amid the signing of new sales agreements.

Last year Edge announced the sale of extended range National Surface Anti-Ship Missiles and the sale of the shorter-range version of the advanced system, to the Brazilian navy in a deal worth Dh600 million.

It also signed a partnership agreement with India’s Icomm for the manufacture of small arms in Asia’s third-largest economy, including pistols, sub-machineguns and assault rifles.

“Number one exportable product is ammunition. This is a commodity everybody needs, yet we also see other things,” Mr Al Marar said. “We have exported some drones, weapons, smart weapons … so it is really growing,” he said.

The current geopolitical tensions in the world from the Gaza conflict to the Ukraine war are boosting demand for its products.

“It is boosting demand for everyone but then it becomes a game of how fast can you conclude and how fast can you supply,” he said, while adding that the supply chain for the manufacture of products continues to be an issue and the company is looking at alternative ways to solve the problem.

“The UAE is neutrally positioned. We noticed that buying from the UAE does not upset East or West. So that gives us a plus.”

The company is teaming up with Italian shipbuilder Fincantieri to manufacture sophisticated naval vessels and sell them in different markets globally. Last week, it signed an agreement in Rome to set up a joint venture in Abu Dhabi.

The new joint venture will be launched in the first half of this year and has an order backlog worth €30 billion ($32.42 billion) with Angola being the largest customer for the supply of naval vessels, Mr Al Marar said. It is also developing a submarine for UAE’s usage as well as export across the region.

Edge expects demand for naval vessels to rise as countries look to modernise their fleet amid continued geopolitical tensions.

“We see demands from east to west … from modernising an existing fleet to even establishing new fleets … we can see the demand is there,” he said.

The naval vessels market globally is expected to reach $206.43 billion by 2029 from $110.51 billion in 2024, driven by higher demand from North America and the Asia-Pacific region, a Mordor Intelligence report said.

The company will continue to look for new acquisitions after finalising several deals in the last twelve months, Mr Al Marar added.

Last year, it bought a 52 per cent stake in Anavia, which builds unmanned helicopters capable of carrying out mission-critical surveillance, reconnaissance and transportation, to boost its portfolio.

Edge also announced deals including the acquisition of a majority stake in Estonia's Milrem Robotics in February last year to develop capabilities in robotics and autonomous systems in line with the UAE's expanding manufacturing sector.

In March, it bought Trust International Group, an Emirates-based defence trading specialist, to boost its portfolio.

“We are looking at these opportunities from a technology acceleration perspective. Any acquisition you do elsewhere will give you a foot in that country, let alone the region.”

The company aims to focus on three areas including the development of smart weapons with “more precision, more precise, more effective” as well as autonomous systems and electronic warfare as part of its future growth strategy.

Updated: February 28, 2024, 3:00 AM