Indra's profit nearly doubles on operations boost, higher TESS stake valuation

By Mireia Merino

(Reuters) -Spanish defence and technology firm Indra said on Wednesday its net profit soared 88% in the first six months of the year, thanks to operational improvements and the one-off impact of the increase in the valuation of its stake in TESS.

European defence stocks have been gaining ground recently amid heightened geopolitical tensions and U.S. President Donald Trump's pressure on NATO allies to hike their defence spending to 5% of gross domestic product by 2035.

The company booked a net profit of 215 million euros ($252 million), up from 114 million euros in the same period a year ago.

Indra seeks to scale up its production capacity through a series of acquisitions as governments rush to increase their military expenditures across Europe, where Indra generates over 70% of its revenues.

Revenues rose 6.3% to 2.45 billion euros between January and June, above the 2.3 billion euros reported last year and the 1.28 billion euros forecast by analysts in an LSEG poll.

The company's order backlog reached 9.47 billion euros, up 32.5% year-on-year, of which 1.45 billion euros correspond to the consolidation of its TESS Defense unit. Indra sees the defence order backlog doubling by the end of 2025.

Indra, which is partly owned by the Spanish government, increased its stake in TESS Defense to 51% from a previous 24.7% in October.

The company said it was on track to meet all the commitments in its strategic plan for 2025 as it continues to benefit from strong defence sector tailwinds.

It expects to complete the acquisition of satellite operator Hispasat in the second half of the year, CEO Jose Vicente de los Mozos told an analyst call on Wednesday.

De los Mozos added Indra was considering selling its outsourcing business BPO, which is part of the Minsait unit, to Anglo-Swiss fund AS Equity Partners.

($1 = 0.8530 euros)

(Reporting by Mireia Merino in Gdansk; Editing by David Latona and Toby Chopra)