18 February 2010 | Jake Kanter
Defence supplier BAE Systems has lost a US army vehicle contract, affecting its financial results.
The company’s preliminary results today showed it made a loss of £45 million last year. In 2008 it reported a profit of £1.77 billion.
The figures were affected by a £973 million write-down – where the book worth of an asset is reduced because it is found to be overvalued compared to the market - at its US firm Armor Holdings following the loss of a deal to supply medium tactical vehicles.
The company’s overall underlying earnings, before the write-down and other one-offs are stripped out, was £2.2 billion for 2009, up from £1.9 billion in 2008.
BAE said that defence spending in the UK and US is expected to come under further pressure. In a statement it said: “With expectations of a more challenging business environment ahead, the focus on driving performance and efficiency in the business will be key. Cost reduction measures are being aggressively implemented across the group.”
It did not outline what form these cost-cutting measures take.
BAE this month agreed to pay the US Department of Justice and the UK Serious Fraud Office a total of £287 million in fines to settle corruption claims.