BAE profit jumps as Ukraine War boosts defence spend

British military equipment maker BAE Systems on Wednesday announced a 57 percent jump in net profits for the first half of this year as government defense spending increases amid the war in Ukraine.

Profit after tax increased to 965 million pounds ($1.2 billion) in the six months to the end of June compared with 615 million pounds in the first half of last year, BAE said in a statement.

Revenue climbed 13 percent to 11 billion pounds.

“Our global footprint, deep customer relationships and leading technologies enable us to effectively support the national security requirements and multi-domain ambitions of our government customers in an increasingly uncertain world,” chief executive Charles Woodburn said alongside the earnings.

Shares in BAE rallied 4.5 percent in early London trading following the update, as the group also hiked its dividend and said it would return up to 1.5 billion pounds to shareholders by further repurchasing stock.

“Leading defence contractor BAE Systems posted a very strong set of results… benefiting from a general rearmament among NATO countries as the war in Ukraine grinds on,” noted Andy Chambers, a director at research group Edison.

“The company’s order backlog has reached a record 66.2 billion pounds — this is very much typical of the sector, as modern high-tech armaments systems often take many years to produce.”