BAE Systems shares rose this morning as Britain’s biggest defence company reported a nine per cent increase in first half earnings.
The firm said “a number of operational improvements” had driven the growth, including pushing on with delivering Typhoon and Hawk fighter jets to the Qatari government.
The defence giant’s market value rose two per cent in morning trading.
Core earnings rose nine per cent to £999m on a year-on-year basis for the first six months of 2019. Sales increased seven per cent to £9.4bn against the same period in 2018.
Half year net debt remained roughly stable at £1.9bn, while the company’s share of its net pension deficit grew to £4.3bn, from £3.1bn at the same point last year.
The firm increased the interim dividend from 9p per share to 9.4p per share.
Why it’s interesting
BAE said this morning it had improved its maritime and combat vehicle operations, which had helped propel the growth in profit.
This came despite the fact it is still struggling to fulfil a major order to Saudi Arabia after Germany banned sales to the country. The ban followed the killing of Saudi journalist Jamal Khashoggi in October.
Chief executive Charles Woodburn said BAE had been “working closely with industry partners and the government to continue to fulfil our contractual support arrangements” with Saudi Arabia.
The export ban has put a question mark over a multi-billion pound deal to sell 48 Eurofighter Typhoon jets to Riyadh, built by a BAE-led consortium that also includes MTU Aero Engines and Airbus.
What BAE Systems said
Woodburn said: “The first half performance underpins our guidance for the full year with improvements being made on a number of operational fronts.
“Our priority is to deliver consistent and strong operational performance for our customers and shareholders to enable us to meet our growth expectations over the medium term.”