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BAE sees opportunity from higher European defence budgets

UK, Japan, Italy fighter jet project door still open to others: BAE CEO
UK, Japan, Italy fighter jet project door still open to others: BAE CEO Copyright Thomson Reuters 2022
Copyright Thomson Reuters 2022
By Reuters
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LONDON -Britain's BAE Systems said it saw opportunities in the medium term from increased defence spending in Europe and other markets as it reported first-quarter trading in line with expectations, with good operational performance maintained.

"We see opportunities to further enhance the medium-term outlook as our customers address the elevated threat environment," Chief Executive Charles Woodburn said on Thursday.

BAE's shares have performed strongly since Russia invaded Ukraine in February, and reached an all-time high of 782.4 pence on Wednesday.

The defence company said orders to date had been positive, particularly on long-term programmes, such as the F-35 Lightning combat aircraft, and it continued to expect a strong year of order intake.

It said many countries had announced or were making plans to increase defence budgets to counter elevated threats on multiple fronts, noting for example the step up in German spending following Russia's invasion of Ukraine.

"We see other nations increasing or likely to increase their defence budgets to address the threat environment and for NATO countries to move to, and even beyond, their 2% of GDP commitments," it said.

It said it was well placed through its position on Eurofighter Typhoon and shareholding in missiles company MBDA, and was pursuing "a number of significant opportunities" in the region.

It also said the spending outlook was positive in the United States, and there were further opportunities in Britain, Asia-Pacific and the Middle East.

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