BAE Systems (Picture: PA).
Technology

BAE Systems Sees Profits Rise And Record Orders In 2018

The company, however, voiced concern that Germany's ban on arms sales to Saudi Arabia could affect future business.

BAE Systems (Picture: PA).

(Picture: PA).

Defence contractor BAE Systems achieved more than an £8 billion increase in orders in 2018 and a 14% rise in annual profits.

BAE Systems is behind a number of Ministry of Defence (MOD) assets including the Typhoon and F-35B fighter jets, Astute class submarines and the building of new aircraft carrier HMS Prince of Wales.

However, revenue slipped to £16.82 billion from £17.22 billion due to lower production of Typhoon aircraft.

The firm is concerned that Germany's ban on selling arms to Saudi Arabia may affect its ability to provide combat aircraft support services to the kingdom.

Eurofighter Typhoon (Picture: MOD).
Eurofighter Typhoon (Picture: MOD).

Last year, it was announced 48 Typhoons could be delivered to Saudi Arabia as talks between the two governments continue

The Typhoon is partly built in Germany and the company say it is "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," they added.

There were also positives for the company - they highlighted a record order intake worth £28.3bn - an £8bn increase which saw the contractor's order backlog increased by £9.7bn to £48.4bn.

BAE Systems is leading the construction of HMS Prince of Wales
BAE Systems is leading the construction of HMS Prince of Wales

Pre-tax profits came to £1.22 billion for 2018 compared with £1.07 billion the previous year.

BAE Systems 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."

The company is also responsible for the construction of eight Type 26 frigates and was buoyed by a £1bn pound boost in Ministry of Defence (MOD) spending in October’s budget.