StockMarketWire.com - Defence company BAE Systems said it expected 'much stronger' performance in the second half of the year after the impact of the pandemic dented first-half profit.

Sales for the half year were expected to be broadly stable year on year whilst half year profit was expected to be 15% lower than last year primarily due to 'cost under recoveries in the period, significantly reduced volumes in higher margin commercial work and the sales mix year on year,' the company said.

In the second quarter, the company's air and maritime sectors and its US commercial avionics business were the most affected by the pandemic.

But performance in the second half was expected to be much stronger than in the first half - assuming no new significant Covid-19 related disruptions - underpinned by further improvements in the third quarter, it added.

'Despite some additional profit to cash impacts from COVID-19 disruptions, operating business cashflow in the half-year remains broadly in line with expectations and, excluding the one-off £1bn injection into the UK pension scheme, is likely to be consistent with the first half cash profiles seen in the last two years,' BAE Systems said.





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