BAE Systems warns of drop in first half profit amid coronavirus disruption
BAE Systems first-half profit will be about one-sixth down on last year, after the coronavirus pandemic hit the defence giant.
The company said that it still enjoyed strong demand for its defence products which make up the vast majority of its business.
However, its manufacturing lines have faced disruption amid the lockdown, it said this morning.
Sales have suffered in its higher-margin commercial equipment, such as electronic systems for passenger jets, it said, dragging down profit.
These commercial units also make systems for domestic buses, and are primarily based in the US. BAE said it expected weaker demand across these products for the coming months.
Meanwhile in the UK, it said 90 per cent of its employees were back to work, most from home, while “critical on site workers” were back at its shipyards and manufacturing plants.
But supply chain disruption as well as social distancing and other safety measures in factories had affected productivity.
In April, BAE Systems deferred a decision on its final dividend payment to shareholders for 2019. It said today that it would update markets again next month.
Shares were 0.5 per cent up at midday.