BAESY Bae Systems Plc (PK)

By Anthony O. Goriainoff

BAE Systems PLC said Thursday that it benefited from a record order intake in 2022 of 37.1 billion pounds ($44.69 billion) which was propelled by an order backlog of GBP58.9 billion, despite supply chain and inflation issues.

The U.K. defense-and-aerospace group said that its record orders and financial performance gave it confidence in delivering long-term growth and to continue investing in new technologies, facilities and thousands of highly-skilled jobs.

"For 2023, we're forecasting further top-line growth, continued margin expansion, higher EPS and we're also increasing our rolling three-year cash targets, all of which demonstrate that the business has growing momentum for the future," the company said.

The FTSE 100 company said its opportunity pipeline was growing with domestic, export and collaboration opportunities, adding that "we have the capabilities to support our U.K. customer in its emerging space ambitions".

Moreover, BAE said it was well aligned with the U.S. Defense Department's emphasis on advanced technologies and that its products in areas such as electronic warfare, communications, computers or intelligence "map directly into priorities in the U.S. national defense strategy." Its participation in U.S. foreign military sales enabled it to serve the European and NATO market through multiple channels, it said.

The U.K.'s renewed commitments to its major programs in warship, submarine and combat aircraft design and build allowed for long-term investment in these capabilities, the company said.

BAE said that Europe's need for new equipment is urgent--given the current threat level--and that many defense budgets are rising.

In addition to its defense portfolio the company continued to see a recovery in its commercial aviation product lines as passenger flying hours continued to rise, it said.

The company said pretax profit for 2022 was GBP1.99 billion compared with a profit of GBP2.11 billion for 2021.

Sales rose to GBP23.26 billion from GBP21.31 billion a year earlier. The company said that it expects sales in 2023 to rise by 3% to 5%.

Net profit was GBP1.59 billion compared with GBP1.76 billion the year before, and consensus of GBP1.59 billion, also taken from FactSet and based on 12 analysts' forecasts.

Revenue rose to GBP21.26 billion from GBP19.5 billion the year before.

Underlying earnings per share--a metric which strips out exceptional and other one-off items--on a constant currency basis rose 9.5% to 55.5 pence.

BAE said it expects 2023 underlying EPS to increase by 5% to 7%.

The board recommended a final dividend of 16.6 pence a share, taking the total for the year to 27.0 pence.

Shares at 0910 GMT were down 25 pence, or 2.8%, at 877 pence.

Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com

(END) Dow Jones Newswires

February 23, 2023 04:42 ET (09:42 GMT)

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