- Defence giant BAE Systems said a German ban on arms exports to Saudi Arabia may hurt its financial performance after reporting flat earnings for the year as sales fell modestly.

The current German government position on export licensing 'may affect the group's ability to provide capability to Saudi Arabia which may have a consequential impact on the Group's financial performance and relationships,' the company warned.

For the 12 months ended December 31, Underlying earnings (EBITDA) fell modestly to £21.93bn from £1.97bn from a year earlier and sales decreased by £0.4bn to £16.8bn amid falling revenues in its air segment. Operating profit increased by £186m to £1.60bn.

The group reported an order intake of £28.3bn in 2018, up £8bn from a year earlier, and a backlog worth £48.4bn, up £9.7bn from a year earlier.

BAE Systems declared a final dividend of 13.2p a share, taking its total dividend to 22.2p, up 2% from a year earlier.

The company touted improved performance for the coming year.

For the year ending 31 December 2019, the Group's underlying earnings per share is expected to grow by mid-single digit compared to the full-year underlying earnings per share in 2018 of 42.9p, assuming a US$1.30 to sterling exchange rate, the company said.

'The Group made good progress in strengthening the outlook and geographic base of the business, with a number of significant contract wins,' said Charles Woodburn, Chief Executive.

'The defence order backlog is now at a record high with visibility on many of our key programmes through the next decade. Delivering a strong operational performance and continued investment will enable us to meet our growth expectations and underpin the long term.' Story provided by