War in Ukraine increases demand for British submarines and armored vehicles

BAE has also benefited from a round of funding to build Britain's Next Generation Nuclear Submarine. Photo: BAE Systems/PA

Russia's war in Ukraine boosts sales of submarines and armored vehicles for Britain's biggest defense contractor.

BAE Systems sales jump 11% to £12bn in first six months of year , and a further jump is expected as more are registered.

Military spending around the world has been on the rise since Russian President Vladimir Putin attacked Ukraine.

BAE has also benefited from a round of funding from the British project of the next generation of nuclear submarines with ballistic missiles.

In May, BAE was awarded a £1.8bn contract to produce 246 CV90 armored vehicles for the Czech Republic.

The vehicle competing against the troubled Ajax model chosen by the UK is in high demand from BAE and was bought by Sweden , Norway, Finland, Denmark, Estonia, Slovakia, the Netherlands and Switzerland. Sweden agreed to transfer 51 of them to Ukraine.

Sales also came from Poland, which bought anti-aircraft missiles from MBDA, a European missile manufacturer in which BAE has a stake.

3107 Russian Intervention bolsters defense sector

UK development of a Dreadnought-class submarine to replace the Avangard fleet ” in the 2030s, received £2.4bn from the Department of Defence.

BAE CEO Charles Woodburn said: “Global threats around the world are now putting defense and security at the forefront of public spending. And we see it in numbers.”

Worldwide military orders rose 3.7% to $2.24 trillion (£1.75 trillion) last year, according to the Stockholm International Peace Research Institute. was released earlier this year.

The firm is in preliminary talks to set up arms production in Ukraine following May talks with Volodymyr Zelensky.

The FTSE 100-listed manufacturer of Challenger 2 tanks, artillery pieces and ammunition critical to the war against Russia will start by opening a local office and exploring partnerships with local manufacturers.

Mr Woodburn said that the plan is «definitely moving forward». and that BAE and the Ukrainian government had «some good talks.»

Profits will outstrip sales growth in the second half of the year as the company looks to get more high-margin jobs in its defense electronics business. , which covers engine control equipment, jamming and communications systems.

Since the start of the conflict in Ukraine, investor reluctance to buy shares in defense companies has diminished, Mr. Woodburn said.

He explained that before the war, «especially things like our participation in the UK's nuclear deterrence program meant that a number of our traditional shareholders in London put us on the wrong side of this debate.»

«We see this pendulum. we are now moving towards a more balanced position of ethical considerations coexisting with the need for protection and safety.”