BAE Systems chief sees encouraging outlook for Typhoon orders in Middle East

BAE Systems sees an "encouraging" outlook for Typhoon orders from the region despite slowing overall production of the fighter. (Reuters)
Updated 22 February 2018
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BAE Systems chief sees encouraging outlook for Typhoon orders in Middle East

LONDON: The chief of Britain's biggest defense company said he was encouraged by the outlook for orders of the Typhoon fighter jet in the Middle East.
But BAE Systems forecast flat earnings overall in 2018 as it adjusted to lower production of the aircraft.
“The opportunity pipeline - in terms of campaigns in Europe and in the Middle East is as good as we’ve seen it,” BAE Systems’ CEO Charles Woodburn said
in a webcast following the announcement of the UK-headquartered company’s annual results.
“It certainly encourages us we will see growth coming into the next decade in Typhoon production,” he said.
His comments come as Typhoon production has slowed, at the cost of jobs, with the company announcing last October it would make nearly 2000 job cuts, due in part to a lack of jet orders.
BAE’s earnings statement released on Feb. 22 said that overall sales of airborne vehicles is expected to be 5 percent lower due to the completion of Typhoon contracts with Europe, Saudi Arabia and Oman.
Last year, the first eight Typhoon and all eight Hawk aircraft for Oman were delivered. The four remaining Typhoon aircraft are due to be delivered this year.
Typhoon support service packages are now helping deliver more revenue than aircraft production, and this is an area that is expected to grow, said Woodburn.
However, he said he expected Typhoon production will start to stabilize in coming years, particularly due to the confirmed £5 billion contract with Qatar, secured last December, to supply 24 Typhoon aircraft.
“We continue to pursue further export opportunities which if secured would drive growth back,” he said in his presentation.
Woodburn’s optimism could revive hopes in the industry that there might be progress on the much-anticipated, but yet to materialize deal to sell 48 Typhoons to Saudi Arabia.
Saudi Arabia accounted for 16 percent of BAE Systems’ total sales last year, with the US remaining the company’s biggest market accounting for 39 percent of sales.
Overall, BAE Systems’ sales were up by £0.6 billion to reach £19.6 billion in 2017. Operating profit decreased to £1.48 billion from £1.74 billion recorded in 2016.
“With an improving outlook for defence budgets in a number of our markets, we are well placed to generate good returns for shareholders,” Woodburn said in an official statement. 

The company decided on a final dividend of 13 pence per share, making a total of 21.8 pence per share for the year, marking an increase on 2 percent on 2016.


Dubai property developer Damac on hunt for land in Saudi Arabia

Hussain Sajwani
Updated 18 March 2019
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Dubai property developer Damac on hunt for land in Saudi Arabia

  • Brexit a “concern” for UK property market says Sajwani
  • Developer mulls investing “up to £500 million” on London project

LONDON: The Dubai-listed developer Damac says it is scouting for additional plots of land in Saudi Arabia, both in established cities and the Kingdom’s emerging giga-projects such as Neom.
Hussain Sajwani, chairman of Damac Properties, also said the company would look to invest up to £500 million ($660 million) on a second development in the UK, and that it is on track to deliver a record 7,000 or more units this year.
Amid a slowing property market in Dubai, Damac’s base, the developer is eying Saudi Arabia as a potential ground for expansion for its high-spec residential projects.
Damac has one development in Jeddah, and a twin-tower project in Riyadh — and Sajwani said it is looking for additional plots in the Kingdom.
“It’s a big market. It is changing, it is opening up, so we see a potential there … We are looking,” he said.
“In the Middle East, Saudi Arabia is the biggest economy … They have some very ambitious projects, like the Neom city and other large projects. We’re watching those and studying them very carefully.”
The $500 billion Neom project, which was announced in 2017, is set to be a huge economic zone with residential, commercial and tourist facilities on the Red Sea coast.
Sajwani said doing business in Saudi Arabia was “a bit more difficult or complicated” that the UAE, but said the country is opening up, citing moves to allow women to drive and reopen cinemas.
He was speaking to Arab News in Damac’s London sales office, opposite the Harrods department store in Knightsbridge. The office, kitted out in plush Versace furnishings, is selling units at Damac’s first development in the UK, the Damac Tower Nine Elms London.
The 50-storey development is in a new urban district south of the River Thames, which is also home to the US Embassy and the famous Battersea Power Station, which is being redeveloped as a residential and commercial property.
Work on Damac's tower is underway and is due to complete in late 2020 or early 2021, Sajwani said.
“We have sold more than 60 percent of the project,” he said. “It’s very mixed, we have (buyers) from the UK, from Asia, the Middle East.”
Damac’s first London project was launched in 2015, the year before the referendum on the UK exiting the EU — the result of which has had a knock-on effect on the London property market.
“Definitely Brexit has cause a lot of concern, people are not clear where the situation will go. Overall, the market has suffered because of Brexit,” Sajwani said.
“It’s going to be difficult for the coming two years at least … unless (the UK decides) to stay in the EU.”
Despite the ongoing uncertainty over Brexit, Sajwani said Damac was looking for additional plots of land in London, both in the “golden triangle” — the pricey areas of Mayfair, Belgravia and Knightsbridge, which are popular with Gulf investors — and new residential districts like Nine Elms.
Sajwani is considering an investment of “up to £500 million” on a new project in the UK capital.
“We are looking aggressively, and spending a lot of time … finding other opportunities,” he said. “Our appetite for London is there.”
Damac is also considering other international property markets for expansion, including parts of Europe and North American cities like Toronto, Boston, New York and Miami, Sajwani said.
The international drive by Damac comes, however, amid a tough property market in the developer’s home market of Dubai.
Damac in February reported that its 2018 profits fell by nearly 60 percent, with its fourth-quarter profit tumbling by 87 percent, according to Reuters calculations.
Sajwani — whose company attracted headlines for its partnership with the Trump Organization for two golf courses in Dubai — does not see any immediate recovery in the emirate’s property market, or Damac’s financial results.
“(With) the market being soft, prices being under pressure, we are part of the market — we are not going to do better than last year,” he said. “This year and next year are going to be difficult years. But it’s a great opportunity for the buyers.”
But the developer said Dubai was “very strong fundamentally,” citing factors like its advanced infrastructure, safety and security, and low taxes.
In 2018, Damac delivered over 4,100 units — a record for the company — and this year, despite the difficult market, it plans to hand over even more.
“We’re expecting north of 7,000,” Sajwani said. “This year will be another record.”