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Last Updated: Thursday, 23 February 2006, 09:52 GMT
Airbus helps lift profits at BAE
Airbus A380
Airbus orders were stronger than expected, BAE said
Profits at defence and aerospace group BAE Systems have risen, helped by strong orders for Airbus planes.

Operating profits at BAE for 2005 were up 16% to 900m ($1.57bn).

Sales rose 17% to 15.4bn, also helped by the acquisition of US firm United Defense which BAE bought for 2.1bn in March last year.

BAE said orders for Airbus planes, the commercial plane maker in which it owns a 20% stake, had been "substantially ahead of plan".

However, overall profits for its commercial aerospace division fell to 179m from 201m a year earlier because of a weak market for its regional jets.

BAE shares closed down 26.25 pence, or 5.8%, at 421p.

Chairman Dick Olver said that the recent purchase in the US and a restructuring of its European interests had given BAE a "more balanced" structure.

BAE Systems was now "not overly dependent on any one sector but generating good returns for shareholders from a broad range of operations in the world's key defence and aerospace markets".

Pension scheme deficit

However, BAE Systems shares fell by 2% in morning trading, on news that the company's pensions deficit had increased.

It announced that its UK pension fund deficit had risen by nearly 800m, from 3.9bn in 2004 to 4.7bn last year.

It said it had finalised a plan to address the deficit of its main fund, which stands at 2.4bn.

It will cover 60% of the deficit by transferring cash and property to the scheme's assets, and will also increase its contributions.

The rest of the deficit will be covered by a series of benefit concessions from the scheme's members.

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