ClickAJob News

BAE Systems today reported a 17 per cent rise in half-year underlying profits, with a growing demand for armoured vehicles driving sales.

Europe's largest defence firm said that its earnings before interest, tax and amortisation rose to £700 million in the six months to June 30th, up from £600 million for the corresponding period of 2006.

Operating profits also climbed 19 per cent to £643 million, while sales exceeded analyst forecasts by rising eight per cent to £6.9 billion.

BAE said that the "high tempo" of US and UK military operations had driven demand for land vehicles and systems.

The defence group said that it was particularly focussed on identifying and accessing high growth sectors in the US market, with the company's business there having achieved organic growth of 12 per cent in the first half of 2007.

Last month BAE completed the $4.5 billion (£2.2 billion) acquisition of American military manufacturer Armor Holdings, a leading producer of mine-resistant armoured vehicles which the Pentagon has vowed to buy more of as part of its ongoing operations in Iraq.

Presenting interim results for the first half of the year BAE revealed that negotiations were also continuing over a potential deal to supply Typhoon fighter jets to Saudi Arabia.

BAE confirmed that it continues to see the Middle Eastern kingdom as a key market despite ongoing corruption allegations which hang over the company. It is facing claims that it made illegal payments in order to secure military orders from Saudi Arabia as part of an arms deal in the 1980s.

An investigation by the UK's Serious Fraud Office (SFO) into the Al Yamamah deal was dropped in December 2006 on the grounds of national security, but the US department of justice announced in June that it had commenced an investigation into BAE's dealings with Saudi Arabia.

"Notwithstanding these investigations, BAE Systems is performing well and is committed to maintaining its focus on continued value generation and its drive to embed a high performance culture," the company said today.

BAE, which claims that it is seeking "to apply the very highest standards in its business practices", has appointed the UK's former lord chief justice, Lord Woolf, to conduct an independent evaluation of its ethical conduct.