Rolls-Royce pow­ers into profit; shares soar

Kuwait Times - - TECHNOLOGY -

Rolls-Royce pow­ered back into profit dur­ing the first half, pro­pelled by strong de­liv­er­ies for its Trent air­craft en­gines, lift­ing its share price al­most ten per­cent yes­ter­day.

Net profit stood at £1.58 bil­lion ($2.1 bil­lion, 1.77 bil­lion eu­ros) in the six months to June 30 com­pared with a loss after tax of £1.77 bil­lion in the first half of 2016, Rolls said in an earn­ings state­ment, with the group boosted also by a re­cov­ery for ster­ling against the dol­lar. “Civil aero­space large en­gine de­liv­er­ies in­creased 27 per­cent,” War­ren East said in the re­lease, adding that the group’s sav­ings from a re­struc­tur­ing pro­gram were ahead of plan.

“Our strength­ened man­age­ment team is mak­ing good progress in sim­pli­fy­ing the or­ga­ni­za­tion and driv­ing the pace of nec­es­sary change to de­velop a more re­silient and sus­tain­able busi­ness,” he added.

Rolls said rev­enues grew 17 per­cent to £7.6 bil­lion in the re­port­ing pe­riod, helped by strong sales for its Trent XWB en­gines that power the Air­bus A350 ex­tra wide­bod­ied pas­sen­ger plane.

The Bri­tish group’s share price surged 9.6 per­cent to 973.50 pence to sit atop Lon­don’s bench­mark FTSE 100 in­dex, which was up half-a-per­cent over­all at 7,409 points. “With cost-cut­ting con­tin­u­ing, and pro­duc­tion of the flag­ship Trent en­gines ramp­ing up, there are plenty of rea­sons for in­vestors to be pos­i­tive,” said Ge­orge Salmon, equity an­a­lyst at stock­bro­ker Har­g­reaves Lans­down.

East is shed­ding 3,600 jobs as part of his re­struc­tur­ing pro­gram im­ple­mented since start­ing as chief ex­ec­u­tive two years ago. Rolls-Royce last year slumped into a record £4-bil­lion an­nual net loss, rav­aged by a Brexit-fu­elled col­lapse in the pound and a cor­rup­tion fine. In 2016, Rolls took a vast £4.4-bil­lion hit from the drop in the value of the pound in the wake of Bri­tain’s shock EU exit ref­er­en­dum, along­side a £671-mil­lion penalty to set­tle bribery al­le­ga­tions. “Since the end of 2016, the value of ster­ling rel­a­tive to the US dol­lar strength­ened by around five per­cent to the end of the first half, com­pared to the prior pe­riod in which ster­ling de­pre­ci­ated by around 10 per­cent,” Rolls noted in yes­ter­day’s state­ment.

Last year’s ster­ling slump ramped up the cost of im­ported ma­te­ri­als for Rolls, forc­ing the com­pany into its deep loss. —AFP

LON­DON: An ac­tor poses be­sides a Rolls Royce Water­speed Phan­tom Drop­head Coupe at the Blue­bird Cafe in Lon­don.

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