Rolls-Royce warns full year revenue and profits will be flat
ROLLS-ROYCE has said that it expects full-year revenues and profits to be flat – its performance dragged down by adverse foreign exchange rates and a £30m one-off charge in its Marine division.
The group said the currency fluctuations were estimated to impact profit levels by £40m and £300m on revenue, while the exceptional charge against Marine was due to a “product quality issue”.
The impact on the Marine operation is likely to mean a reduction of around 10% in profit and revenue compared to 2013.
The group said its financial performance in 2014 is expected to be weighted to the second half of the year, with around two thirds of the full year 2014 profit being generated in the second half.
It said it remained confident that growth would resume in 2015.
It also said it remained in talks with German group Siemens over the possible sale of its Energy gas turbines and compressor systems operation.
“These talks have not concluded and we will make a further announcement in due course,” it said in its interim statement.
The group said the £2bn deal to acquire the outstanding 50% stake in its Rolls-Royce Power Systems joint venture with Germany’s Daimler was expected to complete in the second half, subject to the usual regulatory approvals.
In Aerospace, it said its operations were boosted with the decision by All Nippon Airlines (ANA) to order Trent 1000 engines to power 25 Boeing 787 Dreamliner aircraft.
The group said it had also started assembly of the first higher-thrust version of the Trent XWB, that will power the Airbus A350-1000 aircraft.
Other notable deals saw it sign a long-term agreement with Lockheed Martin worth up to $1bn to deliver approximately 600 engines to power future C-130J Super Hercules aircraft, while it also agreed multiple contracts worth over $450 million with various US government departments to provide and service military engines.
