Profits nosedive at Rolls-Royce
ENGINEERING giant Rolls-Royce has suffered a huge 96% decline in profitability.
Announcing its 2014 full year results, the firm reported profit before tax of £67m, down massively from 2013’s £1.7bn. Revenue was also down but only by 6% (from £14.64bn in 2013 to £13.73bn).
More positive news is that the firm has a record order book of £73.7bn.
In December the aero engine manufacturer, which has a site in Barnoldswick in Lancashire, revealed details of proposed cutbacks as it looked to try and offset declining demand across it aerospace division.
The company it was cutting 2,600 jobs – the bulk of them within its aerospace division – and announced the closure of a turbine blade factory in Coventry.
The company said at the time the restructuring would see the jobs lost during the next 18 months, with the majority achieved this year.
However, it was warned there will be further cuts to come as it looks to stabilise its position ready for renewed growth in the medium term.
Today, chief executive John Rishton said: “2014 has been a mixed year during which underlying revenue fell for the first time in a decade, reflecting reduced spending by our defence customers, macroeconomic uncertainty, and falling commodity prices.
“In response to these headwinds, we are taking decisive action to improve the Group’s financial performance and accelerating our focus on the 4Cs: Customer, Concentration, Cost and Cash.
“This includes a major restructuring programme in our Aerospace Division and continued rationalisation of our Land & Sea Division.
“The fundamentals of our business remain solid, with long-term growth in demand for the complex power systems we deliver across our Aerospace and Land & Sea Divisions.
“In Aerospace, the delivery of the first Airbus A350XWB, powered by the Rolls-Royce Trent XWB engine, marked a significant milestone in our most important programme. In Land & Sea, we introduced a new family of medium-speed reciprocating engines.
“Our record order book demonstrates the faith our customers continue to place in our technology and underpins our confidence in future growth.”
