BAE Systems expects good 2009 growth


BAE Systems says it continues to anticipate a year of good growth despite a lower volume of land vehicle sales than in 2008.

An interim management statement issued this morning adds that a significant proportion of the group’s sales and profit are derived in US dollars and translated into sterling at the average exchange rate for the period.

“When compared with 2008, the group`s trading results for 2009 would be expected to benefit from a continued weakness of sterling against the US dollar,” the statement adds, saying the company will announce its financial results for the first half year ending June 30 on July 30.

BAE Systems has a significant presence in South Africa in the form of Land Systems SA, previously OMC.

Significant new business awarded to the global defence giant in the period include a £430 million five-year contract from the UK Ministry of Defence for the initial support and maintenance of Typhoon aircraft and a contract for the support, maintenance and enhanced capability provision for the Harrier aircraft valued at £574 million.  

Discussions continue between the four Eurofighter Typhoon partner nations towards an agreement on commitment to a quantity of Tranche 3 production aircraft. The contract is expected to have a value to the group of approximately £2 billion.

In other developments, BAE Systems adds that VT Group plc will exercise its put option to sell its interest in the BVT surface shipbuilding and naval support joint venture to BAE by July 1. “Negotiations with VT continue regarding a possible injection of capital by VT into the BVT business arising from the underperformance of two export contracts contributed to the joint venture by VT.”

Following the acquisition of Tenix Defence in Australia in June last year, “discussions with the vendor relating to the performance of certain contracts continue as part of the completion accounting process.”

Advanced Ceramics Research lists among BAE Systems` recent acquisitions. The companies pencilled an agreement worth $14.7 million in cash in March The Tucson, Arizona-based company is a producer of small unmanned aircraft systems.