BAE Systems has confirmed it is expecting its underlyings earnings to be in line with 2017, and is anticipating to add to its order backlog with contracts in Australia and the US.
Ahead of its annual shareholder meeting, BAE Systems said in a statement that key decisions by governments will be made in the coming months, with lucrative contracts on the horizon.
"In Australia, we’ve secured the 10-year JORN upgrade contract. Whilst we weren’t down selected for Australia’s LAND 400 Phase 2 program, we expect a decision by the mid-year on the preferred tenderer for Australia’s nine-ship SEA 5000 Future Frigate program," chief executive Charles Woodburn said before the shareholder meeting.
In the US, the company is hopeful of securing contracts for amphibious combat vehicles, while in the Middle East discussions are progressing with Saudi Arabia for its plans to buy Typhoon fighter jets.
"In the air sector, discussions to finalise the financing conditions within the contract signed with Qatar in December 2017 are progressing," Woodburn said.
"In March, the UK government signed a memorandum of intent with the Kingdom of Saudi Arabia to aim to finalise discussions for the purchase of 48 Typhoon aircraft. Negotiations relating to the principal terms of this agreement are progressing.
"In the US, our business remains well aligned with customer priorities and growth areas. The 2018 budget and the President’s proposal for 2019 maintain positive momentum for the sector, providing greater near-term certainty and support to our medium-term planning assumptions.
"Production is ramping up on a number of long term programmes in electronic systems, combat vehicles and weapons systems, and ship repair volumes are on plan to exceed 2017."
At home in the UK, the company is confident of its position, with defence and security a priority of the UK government.
"In the UK, where our business is centred around our long-term contracted positions in air and maritime, Defence and security remains a priority for the UK government and the group expects this to be re-affirmed in the Modernising Defence Programme. The group's contracted positions in maritime are being furthered by additional awards on the UK submarine programs," the company's AGM statement said.