MIDLANDS-based aero engine manufacturer Rolls-Royce has announced a strong order book and a 4% increase in interim pre-tax profits.
The company, which supports thousands of jobs in the region’s aerospace supply chain, said it had seen strong trading during the first six months of the year and expected full year underlying profit to be ahead of last year.
The latter was underlined by a strong performance at the recent Farnborough Air Show where the company secured new orders worth $1.7bn.
Two new Rolls-Royce powered aircraft made their Farnborough debut, the Boeing 787 Dreamliner and the Airbus A400M, while the group extended its market dominance by winning orders worth more than $1bn for is Trent 700 engine.
The engines will power 17 Airbus A330s from Aeroflot, Russia’s national airline plus Garuda Indonesia Airlines. Both of these contracts were boosted by long-term service agreements.
Air Transat has extended its service agreements and ordered new Trent 700EP (Enhanced Performance) engine kits, which are designed to improve efficiency and environmental performance.
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The Trent 700, the only engine specifically designed for the A330, remains the market leader for the aircraft and has secured more than 70% of new orders in the past three years. The engine delivers the best performance, lowest emissions and lowest fuel burn on the Airbus A330.
In addition, International Aero Engines, in which Rolls-Royce is a senior partner, received orders for V2500 engines from Yemenia, China Southern and Vietnam Airlines, with the value to Rolls-Royce being around $470m.
The group’s defence aerospace business also announced a contract to support the Canadian Air Force CC-130J fleet, valued at more than $70m. This contract will provide Lockheed Martin with logistics support for the AE 2100D3 engines for the next six years.
Issuing its interim results today, the firm said its order book remained strong at £58.4bn, slightly above the 2009 year-end figure of £58.3bn.
Group revenues during the six-month period increased to £5,421m, which compared with £5,142m in the first half of last year. Revenues on an underlying basis increased by 7% to £5,259m. Services revenues increased by 8% to £2,615m on an underlying basis.
Underlying profit before tax increased by 4% to £465m, up on the £445m recorded in the same period last year.
The company said it was in a strong financial position with its average net cash for the period up by £155m to £915m, which compares to £760m in the same period last year.
The balance sheet shows net cash of £1,388m at the period-end, compared with £1,275m last year.
The interim payment to shareholders has gone up 6.7% to 6.40p per share.
Sir John Rose, chief executive, said: “Rolls-Royce delivered a robust performance despite the continuing uncertainty in the global economy.
“We continue to make progress with our development programmes and new facility construction; these investments are designed to underpin the growth embedded in our order book and achieve productivity improvements.
“We now expect underlying profit for the full-year to be modestly higher than 2009, mainly due to good cost control and a strong trading performance from our Marine business.”
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