BAE Systems sees sharp drop in 2011 sales as defence budgets shrink

Feb 16, 2012, 11:37 GMT

London - Leading British defence group BAE Systems Thursday reported a 14-per-cent drop in sales in 2011, which it said reflected a decline in defence spending in key markets.

The company said in a statement that revenues fell to 19.1 billion pounds (30 billion dollars) last year, while pre-tax profits were marginally up at 1.4 billion pounds.

BAE, the world's second-biggest armament and aerospace concern, warned that it did not expect sales to grow in 2012.

The company said the drop in revenue was due mainly to shrinking defence budgets in the United States and Britain. It also named a delay in the supply of the rest of 72 Eurofighter Typhoon jets to Saudi Arabia as a factor.

BAE, which is a member of the European Eurofighter consortium, suffered a setback recently when India named French rival Dassault Aviation as its preferred bidder over European consortium Eurofighter for the supply of fighter jets.

With regards to the India contract, BAE chief executive Ian King said his company was in discussions with its other European partners and would consider dropping its price, the Press Association said.

He said BAE was expecting shortly to seal a deal with Saudi Arabia over the supply of Typhoon jets and was also in discussion to supply fighter jets to the Gulf state of Oman.