BAE Systems, the UK’s biggest arms supplier, has reported a record year for new orders as Western governments ramp up defense spending in response to Russia’s attack on Ukraine.
The UK’s largest engineering firm said new orders for 2021 totaled £37.1bn, bringing outstanding orders to £58.9bn. Demand for BAE weapons, ammunition and military equipment has skyrocketed as nations struggle to bolster their defenses.
Underlying operating income for 2022 was £2.5bn, up 12.5% from 2021, while revenue was up 4.4% to £23.3bn.
The company said: “While it is a tragedy that it took a war in Europe to raise awareness of the importance of defense around the world, BAE Systems is well positioned to help national governments empower their citizens to protect the heightened threat environment. ”
Charles Woodburn, chief executive of BAE Systems, added: “We expect momentum to continue over the medium to long term as governments stockpile, recapitalize equipment and support allies.”
The company’s current work includes the construction of the Type 26 frigates for the Royal Navy and the Royal Australian Navy, the Astute-class nuclear submarines and the Typhoon jet aircraft for the Royal Air Force.
It also equips electronic combat systems for US Army F-35 aircraft and makes Beowulf an unarmed all-terrain vehicle for the US Army. Sales are expected to be even better this year, up 3 and 5 percent, respectively.
Contract negotiations with the Czech Republic and Slovakia, among other things, are advancing due to the “environment of threats and [Russian] invasion,” Mr. Woodburn said.
The weapons maker has previously said it is considering restarting production of the M777 howitzer after its fighting on the battlefields in Ukraine revived interest in the weapon. Several countries have reportedly expressed interest in acquiring the long-range artillery piece, which is nearing completion after it was found to be effective against Russian tanks and manpower.
Military spending in Europe will rise 53 percent to $481 billion (about £400 billion) between 2021 and 2026, consulting firm McKinsey & Co estimates.
Significant new orders for BAE have also been placed by existing customer Saudi Arabia and MBDA, a European missile systems company of which BAE is a partner.
Mr. Woodburn said it was another year of good results for the group, adding: “This is just the beginning. I still see a lot of potential ahead of me. We invest in the company to support the future. We have advanced technology solutions for our customers.”
BAE said a project with Japan and Italy to build a new fighter called the Tempest is underway and hopes to see a demonstrator of the fighter within five years.
“Our record bookings and financial performance give us confidence that we can deliver long-term growth and continue to invest in new technology, equipment and thousands of highly skilled jobs,” he said.
Source: I News
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