Rolls-Royce profits plunge by 80%
Rolls-Royce has endured a torrid first half of 2016, new results released this morning reveal.
The manufacturing giant’s profits dropped by 80% to £104m for the first half 2016. However, this did beat analyst forecasts that it would be £16m in the red.
On an unadjusted basis, the engine maker suffered a pre-tax loss of £2.15bn in the six months to June due to a large one off financing cost.
The firm said it was laying off 400 people this year – 200 more than previously announced. Some 270 people have already left the business, it said.
Warren East, chief executive, said: “In the first half of 2016 Rolls-Royce performed broadly in line with expectations, delivering a result a little better than breakeven; and the outlook for the rest of the year remains unchanged.
Order intake has been good and, although known headwinds constrained revenue and profit in the first half, the business remains well positioned to deliver a solid second half performance supported by growth in engine deliveries, stronger aftermarket revenues and incremental benefits from our ongoing restructuring programmes.”
Mr East said the trading outlook for 2016 was unchanged.
He added: “We have taken some positive first steps on the journey that will lead Rolls-Royce to profitable and highly cash generative growth. Our strategic advantages lie in our focus on engineering excellence, operational excellence and capturing value in the aftermarket. In the first six months, we have made progress with our business transformation; introducing the greater pace and simplicity required to make Rolls-Royce a more resilient company.”
