Register to get unlimited Level 2

BAE profits rise, but warns over German ban on exports to Saudi

By Frank Prenesti

Date: Thursday 21 Feb 2019

(Sharecast News) - Defence contractor BAE Systems said full year operating profit rose 14.3% per cent to £1.6bn as it warned that Germany's move to halt arms exports to Saudi Arabia could hit its ability to supply the controversial country in the aftermath of the murder of Saudi journalist Jamal Kashoggi.
BAE said it was working closely with the UK government to "minimise the risk of any such occurrence and the impact it would have on financial performance, the supply chain and relationships".

Looking forward, the group said it expected underlying earnings per share to grow by mid-single digit compared to the full-year underlying earnings per share in 2018 of 42.9p.

Revenue fell to £16.8bn from £17.2bn and sales were flat at £18.4bn while net debt jumped 20.2% to £904m from £752m.

Order intake hit a record £28.3bn, a 39.4% increase as the order backlog grew to £48.4bn from £38.7bn last year.

Earnings per share rose 20.4% to 31.3p, up from 26p the year before. A final dividend of 13.2p a share was declared for a total of 22.2p, an increase of 2% over 2017.

Chief executive Charles Woodburn said the group made "good progress in strengthening the outlook and geographic base of the business, with a number of significant contract wins".

"The defence order backlog is now at a record high with visibility on many of our key programmes through the next decade. Delivering a strong operational performance and continued investment will enable us to meet our growth expectations and underpin the long term."

However, the company warned that it was reliant on the approval of export licences by a number of governments in order to continue supplies to Saudi Arabia.

"In this context, the position on export licensing currently adopted by the German government may affect the Group's ability to provide the required capability to the Kingdom. "

On Wednesday UK Foreign Secretary Jeremy Hunt called on Germany to exempt big defence projects or face damage to its economic and European credentials. In response his German counterpart Heiko Maas said future decisions on exports would be dependent on how the conflict develops in Yemen where the Saudis are involved in a bombing campaign.

..

Email this article to a friend

or share it with one of these popular networks:


Top of Page