Qinetiq blames supply chain chaos as costs soar: Defence firm warns profits will take a hit
Qinetiq has become the latest business to complain of supply chain chaos, warning that one of its projects could see costs balloon by up to £15million.
The defence company said its profits for the six months to September were in line with expectations, and that it had raked in £700million of new orders – 25 per cent more than the same time last year.
But for the full year, it said profitability would be at the lower end of its expectations due to the withdrawal of troops from Afghanistan and Covid-19 delays in receiving materials and components.
Supply woes: Qinetiq said said profitability for the full year would be at the lower end of its expectations
Firms from toy makers to car manufacturers have had their businesses turned upside down by the pandemic’s effect on supply chains.
Added to that, the pick-up in manufacturing since Covid restrictions lifted has led to a shortage of some materials.
Qinetiq, which makes robots used to defuse explosives as well as technology for fighter jets and other military devices, said in its trading update: ‘We are experiencing technical and supply chain issues on a large complex programme, which, if unmitigated, could result in the need for a one-off write down to our short-term guidance.
‘We are working closely with our customer and are making progress, jointly with our supply chain, towards recovery of the programme and mitigating this risk to less than £15million.’