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UK's Newly Elected Prime Minister Rishi Sunak Awards $4.9B Contract To BAE Systems, Extends Support To Ukraine

Benzinga · 11/15/2022 17:37
  • British Prime Minister Rishi Sunak extended his support for Ukraine at the G20 summit while confirming a long-planned order for warships from BAE Systems plc (OTC:BAESY) (OTC:BAESF).
  • "Russia's actions put all of us at risk," he said at the summit in Bali, Indonesia. "As we give the Ukrainian people the support they need, we are also harnessing the breadth and depth of UK expertise to protect ourselves and our allies."
  • Sunak also announced a £4.2 billion ($4.94 billion) contract to BAE Systems to build five ships for the Royal Navy, a government statement said.
  • In addition to the three ships already under construction, the contract comes as the next phase in the Type 26 frigate program, and all eight of the Type 26 frigates are expected to be completed by the mid-2030s, Reuters reported.
  • In a market update, BAE Systems said that with £18 billion secured in the first half, the company secured a further £10 billion since the half year.
  • The company said it is working through ongoing supply chain challenges, especially in those business areas reliant on microelectronics.
  • Consistent with guidance, BAE continues to drive top-line growth and margin expansion despite the various headwinds but does not see a material impact from higher energy prices.