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BAE military orders slow
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March 1, 2001: 5:57 a.m. ET
British defence company posts loss as military orders slow, costs overrun
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LONDON (CNN) - British defence company BAE Systems said on Thursday a slowdown in military orders and cost overruns bruised its 2000 financial performance.
The company, formed in 1999 by the merger of British Aerospace and Marconi Electronic Systems, made a loss of £13 million, or 1.1 pence a share, compared to a profit of £324 million, or 27.6p a share, a year ago.
 The defence and aerospace manufacturer said earnings were reduced by £300 million in extra costs linked to a contract for the £2 billion Nimrod maritime patrol aircraft. That cuts earnings per share to 19.2p from 25.8p.
The company also said order intake from the UK Ministry of Defence is falling short of expected levels, which -- with lower than expected export orders for its Hawk plane -- is resulting in a lower level of activity.
BAE said it will take a restructuring charge against profit in 2000 and 2001 as it winds down production of its Tornado fighter project and gets ready to fly Eurofighter Typhoon military aircraft straight from the production line.
The company sent a clear warning in January that investors should expect a profit shortfall. The company said profit before interest and excluding goodwill amortisation and exceptional items fell to £950 million from £1.11 billion. Sales rose 36 percent to £12. 2 billion.
"At first sight, the EBIT level the results are pretty much in line, and the cash level looks better than expected," Andy Chambers, analyst at Commerzbank told Reuters.
The company, which also owns 20 percent of Airbus Industrie, said it had cash inflows of £1.9 billion and a net debt at the end of December of £900 million.
 Its order book rose 12 percent to £41 billion, including a £1.2 billion contract for the British navy to design, develop and manufacture a Type 45 destroyer.
The company expects its 2001 results would be "broadly unchanged compared to the underlying 2000 performance."
"The merger has been a real success. We are today operating as one fully integrated company... Looking ahead, BAE Systems is now a well-balanced company underpinned by a strong order book, strong balance sheet and excellent cash generation," Chief Executive John Weston said in a statement.
Shares in BAE Systems (BA-) rose 5 percent to 309.25 pence in morning London trade. 
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