Britain’s BAE Systems forecast another year of growth in 2020, saying the company was well-placed to take advantage of increased defence spending that could help to offset any future impact from a German ban on arms exports to Saudi Arabia.
Full-year results announced on Thursday at the upper end of forecasts, helped to drive shares 3.5% higher at 664.6 pence.
The maker of Typhoon fighters, combat vehicles and Astute Class nuclear-powered attack submarines, has been affected by a German ban announced in 2019 on exporting arms to Saudi Arabia.
The export ban has put a question mark over a multi-billion pound deal to sell 48 Eurofighter Typhoon jets to Riyadh, built by a BAE-led consortium that also includes MTU Aero Engines and Airbus.
CEO Charles Woodburn shrugged off its impact, saying there were other opportunities.
“A number of European countries are looking to increase their defence spending and move closer to meeting their NATO commitments. The group is well-positioned to benefit,” he told reporters on Thursday.
The company expects Germany to order more of its Typhoon jets, anticipates higher sales at European missile maker MBDA, in which it owns a stake, and new orders for its Swedish-based land vehicle business.
Woodburn also predicted business in the Middle East, despite the difficulties in Saudi Arabia, adding:
Within the Middle East region, there are a number of other customers in addition to Saudi, who I think in future will be looking at additional Typhoons
Oman, Kuwait and Qatar are existing customers.
The Typhoon, whose full name is the Eurofighter Typhoon, is the most important combat aircraft in BAE Systems’ portfolio.