BAE Systems recorded a full year loss of £114 million ($223 million) in its regional aircraft business, though the manufacturer as a whole increased its group operating profits more than a third to £1.05 billion in its first annual figures since the disposal of its Airbus stake.
The company saw operating profits rise from £761 million to £1,054 million, according to its 2006 preliminary performance figures, with defence sales in the USA the key contributor, the company says. Sales increased by 9% from £12.5 billion to £13.7 billion last year.
BAE describes the figures as a "good financial performance." In a statement, the company says: "The performance of the US businesses has again been excellent, with the group's expansion in the US market over recent years generating good returns."
However, the loss in the firm’s regional aircraft business marks an increase on the £95 million loss recorded for the division in 2005. The company, which had last year warned underlying losses in the support business were likely to continue, says the loss includes £37 million for costs incurred in managing the leased aircraft portfolio and supporting the fleet, and £77 million in provisions taken.
In a conference call today, BAE executives added that they believed the unit was approaching the “end game” on losses. “I couldn’t preclude there will be more [losses] but I wouldn’t expect it would be at 2006 levels,” BAE Systems chairman Mike Turner said.
BAE Systems results mark the company’s first since the disposal of its 20% stake in Airbus, and cover continuing businesses only and the company compares them against restated 2005 figures which exclude Airbus. Group EBITDA rose 33% to £1.2 billion in 2006, operating profit jumped from $761 million to £1.05 billion, and full year turnover grew 9% to £13.77 million.
Source: FlightGlobal.com
