BAE reports dip in earnings
DEFENCE manufacturer BAE Systems has posted a 3% fall in first half profits after it was hit by a delay in the completion of a key deal with Saudi Arabia as well as lower spending by European and the US military.
The company, a key regional employers with major manufacturing sites in Lancashire and Cumbria, reported pre-exceptional earnings (ebitda) of £939m in the six months to the end of June on sales 10% lower at £8.33bn.
BAE, which makes Tornado fighter jets near Preston and is part of the Eurofighter consortium, said it expected to deliver some growth in the full year subject to the completion of the Saudi deal.
Modest growth in underlying earnings per share is anticipated, assuming a satisfactory conclusion to the Salam pricing negotiations in 2012,” the company said in a statement.
Saudi Arabia signed a contract with BAE in 2007 to buy 72 Typhoon aircraft, 24 of which have been delivered to the Royal Saudi Air Force. The Salam deal, as it is known, is worth around £4.5bn.
Talks between BAE and Saudi over changes to the price of the deal are expected to be completed in the coming months.
The company, which will build Britain’s next generation of nuclear-armed submarines at Barrow, increased the interim dividend by 4% to 7.8p per share.
BAE has axed hundreds of jobs and closed several sites including Chadderton and Woodford in Greater Manchester over the last two years as defence spending and demand has been hit.
