British military equipment maker BAE Systems on Wednesday announced a five percent rise in annual net profit, boosted by government defense spending amid the war in Ukraine.
Profit after tax at Europe's largest defense contractor stood at almost GBP2 billion ($2.5 billion) for 2024, BAE said in an earnings statement. Revenue climbed 14 percent to GBP26.3 billion.
The results came in a week when shares in European defense companies rallied as European leaders gathered in Paris on Monday to discuss the war in Ukraine amid talk of greater defense spending.
That meeting followed a sudden policy shift from the United States, which began its first high-level talks in over three years with Moscow, and without Europe, to pave the way towards a deal in Ukraine.
"We remain confident in the positive momentum of our business into the future," said BAE chief executive Charles Woodburn.
He also praised the "exceptional visibility of our record order backlog," which reached GBP77.8 billion last year.
The manufacturer builds military equipment including combat vehicles, torpedoes and other weaponry.
Shares in BAE slid around one percent in reaction on London's benchmark FTSE 100 index, which was down two percent overall.
"With the shares trading at record highs going into these numbers, and having more than doubled since Russia's invasion of Ukraine in 2022, a high bar was set," said AJ Bell head of investment analysis Laith Khalaf.
He attributed the market reaction to the results to "the fact BAE merely hit the top end of expectations rather than outright beating them."
The company is working on its supersonic next-generation fighter jet, alongside Italy's Leonardo and Japan Aircraft Industrial Enhancement Co.
