Rolls-Royce looks to H2 for better times
MANUFACTURING giant Rolls-Royce has said it is looking to the second half for an improvement in its performance.
In an interim management statement, the company said it was maintaining its full year guidance for 2015.
“We expect performance to be more weighted towards the second half. In Aerospace, deliveries of Trent XWB engines will ramp up. In Land & Sea, as expected, trading continues to be affected by lower oil prices and has therefore started more slowly than in 2014,” it said.
The restructuring initiated by the company last year – which will result in the closure of a turbine blade factory in Coventry – is expected to impact first half performance but it said the benefits of the strategy would begin to be felt later in the year.
“We therefore also expect free cash flow to be more weighted towards the second half than in 2014,” it added.
It said it rates remained at the average levels seen so far in 2015, these movements would be broadly offsetting for earnings. However, it said that on revenue, it expected a near £350m reduction from translation.
The restructuring plan is likely to see a reduction in headcount of around 2,600, principally in its Aerospace division. It said this plan remained on track and to date approximately 1,300 people had left the company. It is also driving down costs in its Land & Sea division.
More encouragingly, it said it had continued to grow its order book and to invest in the future growth of the business.
“In Aerospace, we announced our largest ever order, with Emirates selecting our Trent 900 engines to power 50 Airbus A380 aircraft. Air China also announced that it had selected Rolls-Royce Trent 1000 engines and long-term TotalCare® support to power 15 new Boeing 787-9 Dreamliner aircraft,” it said.
“We continue to improve our delivery and customer focus, with Boeing recognising Rolls-Royce as a Supplier of the Year. At the end of February, Airbus announced that they had decided to reduce A330 production to six aircraft per month in 2016.”
In February, it marked the official opening of its new Advanced Blade Casting Facility (ABCF) in Rotherham. When fully operational in 2017, the facility will have the capacity to manufacture more than 100,000 single crystal turbine blades a year. These blades will feature in a wide-range of Trent aero engines including the world’s most efficient civil large aero engine, the Rolls-Royce Trent XWB.
In Land & Sea, the firm secured a landmark agreement to supply six of new B33:45 medium-speed diesel generator sets to China’s Fuijan Mawei shipyard for the world’s first ever seabed mining vessel, and a contract with Keppel Shipyard in Singapore to supply two all-gas engines for power generation on-board a Floating Liquefaction Vessel (FLNGV) owned by Golar LNG. In Power Systems it secured a major order from Chinese locomotive manufacturer CNR Dalian for the delivery of 232 MTU Series 4000 engines.
The firm will report its interim results on July 30.
