BAE profits soar on Iraq conflict

BBC
Thursday Aug 9, 2007

Work to re-equip UK and US troops in Iraq and Afghanistan has helped profits to soar at defence group BAE Systems.

The UK's largest defence firm, BAE made a pre-tax profit of £657m ($1.4bn), compared with £378m a year earlier.

BAE said the "high tempo" of UK and US military operations was increasing demand for land systems to support armed forces overseas.

BAE, which is facing an anti-corruption probe by US authorities, saw its half-year revenues rise by 10%.

The firm said its sales had benefited from its US operations, which achieved organic sales growth of 12% during the period.

Overall sales at BAE's Land & Armaments business, which includes everything from tanks to munitions, rose 43%.

Corruption scandal

BAE is facing accusations of illegal payments to secure military orders from Saudi Arabia, although the company denies any wrongdoing.

While an investigation by the UK's Serious Fraud Office was halted in March after the government said it would harm national security, the US Department of Justice is moving ahead with its own inquiry.

Last month, BAE greatly expanded its US operations through the £2.2bn takeover of US military manufacturer Armor Holdings.

Armor is a leading manufacturer of mine-resistant armoured vehicles - thousands more of which are due to be bought by the Pentagon for use in Iraq.