Weapons and space technology firm Electro Optic Systems says a rocky geopolitical landscape should keep spending high among Australia’s military allies, with fears over drone and ‘hypersonic attacks’ driving a stronger emphasis on superior defence technology.

EOS - a $615 million company listed on the ASX - on Monday said its strategically placed production centres in Asia, the US, South America, and the Middle East had also shielded it somewhat from COVID-driven disruptions that have hurt a brittle global supply chain.

As a result, EOS said it was experiencing unprecedented demand for its technologies and capabilities, which include a range of weapons and communications systems.

This morning EOS announced it had narrowed its first-half loss to $11.7 million from $14.3 million a year ago, with revenue up 30 per cent to $97.8 million.

This included a $30 million payment from a single customer on a major overseas contract, which has so far seen 29 remote weapon systems delivered.

EOS said it was in advanced negotiations with existing customers for more than $1 billion worth of new contracts.

Nonetheless, shares in the ASX-listed defence firm were down 3.4 per cent this afternoon after the company was forced to defer a portion of revenue into 2022 to mitigate COVID-19 risks.

EOS now expects financial performance for the full 2021 year to fall at the lower end of its previous guidance.

It was otherwise a strong first-half year for the company, with the firm reporting that increasing regional and geopolitical tensions are driving a strong commitment to maintain or increase defence spending among almost all Australian allies.

It did not specifically detail what it meant by ‘hypersonic attacks’, though the technology is believed - by some - to be behind the mysterious Havana Syndrome illness that is said to have afflicted Western diplomats and spies around the world.

The half also saw the abrupt resignation of EOS chairman Fred Bart after nearly 20 years in the job, and the departure of long-time director and joint secretary Ian Dennis.

In Mr Bart’s place, the firm has named long-time director Peter Leahy AC as chair.

Mr Leahy has been with EOS as a director since 2008 after retiring from the Australian Army as Lieutenant General, in the position of Chief of Army.

EOS - which counts former Labor Senator Kate Lundy as a non-executive director - soared to a record high of $10.51 in February last year before crashing in the coronavirus pandemic.

It was trading 3.2 per cent lower at $3.95 on Monday afternoon. The company’s shares have lost a third of their value in 2021.