Rolls-Royce hit with £554m charge on engine troubles
The ongoing issues surrounding its Trent 1000 engine problems has seen Derby-based Rolls-Royce report a loss of £775m for its first half of the year.
The manufacturing giant says it is taking a £554m hit to try and correct the engine problems. The news has clouded results which have seen the company return to underlying profit of £141m from a loss of £84m this time in 2017. Revenues also rose 14% to just over £7bn. Civil Aerospace revenues were up by 26%.
Warren East, chief executive of the firm, said: “Rolls-Royce is at a pivotal moment in its history. After a long period of significant investment and innovation, we are poised to become the world-leader in large aircraft engines. Now we need to deliver the fundamental changes that will enable us to realise the potential of our position, delivering improved returns while continuing to invest in the innovation needed to realise our long-term aspiration to be the world’s leading industrial technology company. Our new business structure and drive for greater pace and simplicity, combined with our growing installed base, means we are well placed to exceed free cash flow of £1bn by 2020 and push towards our mid-term ambition for free cash flow per share to exceed £1.
“This is the time for execution. In Civil Aerospace our installed widebody fleet will continue to grow and we will strive to further reduce cash deficits on engine sales, whilst working hard to minimise the disruption caused to our customers by in-service issues. The benefits of creating a single Defence operation with greater scale and the ability to offer customers a broader range of products and services, should present us with new opportunities. In Power Systems the continued expansion of our end markets is driving strong volume and this, combined with the further product portfolio rationalisation and the development of new service offerings, gives us confidence for the full year.”
Earlier this year, the company announced it was making 4,600 people redundant, with Derby expected to be badly hit.
