UK: BAE reports jump in profits as Ukraine war drags on

BAE Systems, the British weapons manufacturer on Wednesday (February 21) reported a massive 17 per cent jump in annual net profit. The massive increase has come in the wake of Britain's increased defence spending as war in Ukraine drags on.

BAE said that profit after tax was at almost GBP 1.9 billion (USD 2.4 billion), while the revenue jumped nine per cent to GBP 23 billion.

"Our performance, combined with our global footprint and record order intake, means we're well-positioned for sustained growth in the coming years," said chief executive Charles Woodburn in earnings statement.

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He further said that BAE's investment in new technologies would help the company deliver an "order backlog and help ensure... government customers stay ahead in an uncertain world".

Last year, BAE's order backlog reached a record GBP 70 billion.

Shares in BAE tumbled by 2.5 per cent to GBP 12.21 .

"The wider market weakness will not have helped, and there is also the possibility that some investors have simply been taking some profits, with the shares having risen by 35 percent over the last year," said Richard Hunter, head of markets at Interactive Investor, as quoted by AFP.

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Earlier this year, BAE completed acquisition of US firm Ball Aerospace for USD 5.5 billion. The Colorado-based company is a supplier of mission payloads, spacecraft, antenna and optical systems. US Department of Defense and civilian space agencies are among its clients.

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"Despite (BAE) being a UK-based company, a whopping 42 per cent of its sales came from the US last year, making it the largest single contributor," said Aarin Chiekrie, equity analyst at Hargreaves Lansdown, as quoted by AFP.

"US military spending trumps any other country in the world, so having a large exposure here is proving very beneficial and has helped the group bring in a record £37.7 billion worth of orders in 2023."

(With inputs from agencies)