Babcock Reports $190 Million Charge on Type 31 Frigate Contract Losses
Babcock's Financial Update on Type 31 Frigate Contract
Overview of the Charge and Financial Impact
May 13 (Reuters) - Britain's Babcock on Wednesday said it expects to incur a 140-million-pound ($189.64 million) charge on its Type 31 frigate contract due to higher-than-expected rework costs, though it kept its fiscal 2027 outlook unchanged.
Background of the Type 31 Frigate Contract
The defence contractor signed a fixed price contract to deliver five Type 31 frigates - a type of warship - to the Royal Navy in 2019. However, inflation and design-related rework have driven up costs, leaving Babcock with losses of more than 300 million pounds.
Future Outlook and Reporting Schedule
Due to the contract's re-estimate, Babcock now expects to publish its audited preliminary results for fiscal 2026 in late June.
Exchange Rate and Reporting Credits
($1 = 0.7382 pounds)
(Reporting by Yamini Kalia in Bengaluru; Editing by Janane Venkatraman)
