BAE Systems swings back into profit

17th February 2011, Comments 0 comments

British arms manufacturer BAE Systems said Thursday that it bounced back into the black in 2010, aided by deep cost-cutting, but warned about the impact of UK government defence budget cuts.

Net profit hit £1.05 billion ($1.69 billion, 1.25 billion euros) last year, compared with a net loss of 67 million pounds in 2009, while revenues grew 1.8 percent to £22.39 billion, BAE said in a results statement.

"The group has delivered another robust set of results with the business performing well in a challenging business environment," chief executive Ian King said in the statement.

"We are successfully meeting the affordability challenge with both improved returns for shareholders and lower costs for our customers.

"There continues to be sustainable growth prospects across our markets and we have a clear strategy which provides confidence in the resilience and strength of our business."

The group's order book meanwhile shrank 14 percent to £39.7 billion last year, with further reductions expected this year.

"In 2011, a reduction in sales is anticipated as the volume reduction in Land and Armaments is expected to complete and as the changes arising from the Strategic Defence and Security Review reduce activity in the UK businesses," it added.

"The continuing actions to reduce cost and improve efficiency are expected to benefit return on sales and mitigate the impact of that lower activity.

"The 2011 performance is expected to be weighted to the second half of the year."

BAE said it has cut about 15,100 jobs, including contractors, over the past two years as it sought to offset government spending cuts around the world.

© 2011 AFP

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