Rolls-Royce posts worsts losses in history

AERO engine giant Rolls-Royce, which employs more than 1,000 people at two sites in Barnoldswick in Lancashire, has posted a £4.6bn loss for 2016 – the worst in its 111-year history.

The firm – which has no relationship to the world-famous luxury car brand of the same name – was recently hit with a £671m fine agreed with authorities in the UK, US and Brazil that will see it escape corruption charges.

The loss compares with a £160m profit made in 2015.

Despite its turbulent year, revenues at the firm – which has its civil aerospace and nuclear divisions in Derby – rose 9% to nearly £15bn.

Rolls-Royce has been forced to follow accountancy rules and write down the value of its currency hedges to mirror sterling’s slump. Derby company hedges billions of pounds to protect itself against currency fluctuations.

Warren East, chief executive, said: “2016 has been an important year as we accelerated the transformation of Rolls-Royce.

“Despite the significant market and aerospace product transition challenges identified in 2015, we have made operational progress and performed ahead of our expectations for the year as a whole.

“At the same time we have delivered major changes to our management and processes and, while we have made good progress in our cost cutting and efficiency programmes, more needs to be done to ensure we drive sustainable margin improvements within the business.”