LONODN, July 29 (Reuters) – BAE Systems (BAES.L) reported a 14 percent rise in first-half earnings and said it expected to deliver growth in the full-year despite expected lower sales at its land vehicle unit and cuts in European defence budgets.
Europe’s largest defence contractor on Thursday posted underlying earnings before interest, taxes and amortisation of 1.11 billion pounds ($1.73 billion) on sales 9 percent higher at 10.64 billion pounds for the six months to the end of June.
The company, which on Wednesday signed a 500 million pounds deal to supply India with 57 Hawk jets, increased the interim dividend by 9 percent to 7 pence per share but said it “anticipates a challenging trading environment” ahead.
BAE wants to grow its customer support and services business to offset expected cuts in UK defence procurement as Britain moves to cut a massive budget deficit.
Shares in BAE, which have fallen 10 percent in the last three months on concerns about potential cuts to European defence budgets, closed at 317 pence on Wednesday, valuing the company at around 10.80 billion pounds.
Despite the looming cuts, BAE, which derives around a fifth of its sales from Britain, said it saw unprecedented levels of interest from Middle Eastern and Asian governments at last week’s Farnborough airshow. [ID:nLDE66K206]
(Reporting by Rhys Jones; Editing by Matt Scuffham)