Rolls pulls out of Boeing engine race as Trent turbines bill to hit huge £1.5bn

ROLLS-ROYCE HAS pulled out of the race to build engines for Boeing’s new mid-sized planes as it revealed the bill for problems on its Trent 1000 turbines would rise to a mammoth £1.5bn.

The group said it was withdrawing from the competition to power the new Boeing planes, saying it was “unable to commit to the proposed timetable”.

Shares in Rolls slumped 4 per cent as it swung to a pre-tax loss of £2.9bn for 2018 against profits of £3.9bn the previous year after a string of charges, including a £790m hit from the problems with its Trent 1000 engines.

Statutory operating losses stood at £1.16bn for 2018.

The firm said the total cash cost for the engine issues was now expected to increase to around £1.5bn over the five years to 2022 – £100m higher than earlier estimates.

Rolls also revealed a £186m charge after Airbus said it was stopping production of its A380 superjumbo aircraft.

But with the charges stripped out, underlying earnings jumped 71 per cent to £633m last year.

Chief executive Warren East hailed a “breakthrough year” and cheered better-than-expected underlying results in spite of the engine hit. He said: “Despite the challenges we faced on Trent 1000 in-service issues, solid progress has been made realising our ambition to make 2018 a breakthrough year, both strategically and financially.

“Following the restructuring we announced in June last year, we are starting to see the crucial behavioural changes needed to sustain our momentum,” he added.

The group said its restructuring was on track, having already slashed its workforce by around 1,300, and is set to save £400m in annual costs by the end of 2020.