LONDON • British defence firm BAE Systems said yesterday that net profit rose by almost a third during the first half, boosted by strong US and British orders amid the wars in Iraq and Afghanistan.
BAE Systems said that net profit climbed by 27.2 per cent to £515m in the six months ended June 30, compared with the first half of 2006.
Group revenue increased 8.0 per cent to £6.891bn.
Publication of the group’s earnings comes as BAE Systems faces anti-corruption probes in the Untied States and Britain.
“The high tempo of military operations continues to generate growth in requirements for land systems in support of US and UK armed forces deployed on overseas operations,” the company said in its earnings statement.
“The British Army’s operations in Afghanistan and Iraq have resulted in numerous urgent operational requirement orders” for tanks and ammunition, it added.
BAE Systems added that it was “successfully identifying and accessing the higher growth sectors of the US defence market.”
In the first half of 2007, BAE Systems’ US-derived businesses achieved growth of 12 per cent.
In June, BAE Systems won US regulatory approval for a takeover of US defence group Armor Holdings in a deal worth $4.5bn.
The same month, the US Department of Justice launched an investigation into BAE Systems amid allegations the British arms maker paid bribes to secure contracts in Saudi Arabia in the 1980s.
BAE Systems is alleged to have set up a £60m “slush fund” for members of the Saudi royal family to secure business, and made illegal payments to those involved in its deals. BAE strenuously denies the charges.
Analysts have said that the US probe could affect BAE’s purchase of Armor Holdings, which manufactures armoured vehicles and other equipment for the US military and law enforcement.
Britain’s Serious Fraud Office had meanwhile been investigating BAE Systems’ £43bn Al-Yamamah deal in 1985, which provided Hawk and Tornado jets plus other military equipment to Saudi Arabia.
But the investigation was shelved by the British government last December in a move supported by former prime minister Tony Blair amid concerns over Britain’s national interests.
