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Corporate Reports

Profit slumps at British military supplier BAE Systems

Britain's BAE Systems has said its net profit has taken a dive as the firm has suffered from the fallout of reduced US government spending. But the defense giant pointed to medium-term growth despite budget pressures.

BAE Systems announced Thursday its earnings after tax dropped by 82 percent in 2013 in a year-on-year comparison.

Owing to a huge one-off charge linked to a reduction in US government spending, the defense company saw its net profit tumble to 168 million pounds ($280 million, 203 million euros). The firm's underlying profit increasing by 3 percent.

The group announced a 2-percent rise in sales for last year to 18.2 billion pounds, also pointing to an order backlog of 42.7 billion pounds.

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BAE System's performance was boosted by the so-called Salam deal with Saudi Arabia on improved pricing of Eurofighter Typhoon jets.

"Following last year's non-recurring benefit from the Salam price escalation settlement, together with continuing US budget pressures, the group's reported earnings per share is expected to reduce by approximately 5 to 10 percent compared to 2013, BAE said in a statement.

CEO Ian King added that the strong order backlog and a robust balance sheet provided "a solid basis for growth over the medium term."

hg (AFP, Reuters)

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