Thursday, 2 August 2018

Rolls-Royce profits hit by engine faults



Rolls-Royce is taking a charge of £554m to cover costs related to problems with its Trent 1000 engine.

 
The engine, which is used on Boeing's Dreamliner range of aircraft, has experienced problems with its turbine blades.


Airlines have been forced to take aircraft out of use while Rolls-Royce fixed the problem.


The charge contributed to a pre-tax loss for Rolls-Royce in the first half of the year of £1.26bn.


Rolls-Royce said the charge was a one-off exceptional item amounting to about 40% of the estimated expense involved.
The company said the actual cash cost of fixing the problems would be about £450m this year, £450m in 2019 and £350m in 2020. After that, costs would fall substantially, with the work complete by 2022.


Rolls was also hit by costs of reorganising the business and a loss related to the way it accounts for currency moves.


But the company said that if those costs were stripped out, the underlying business was performing well.


Underlying operating profit rose to £205m in the first half of the year, up from £141m in the same period of 2017.


"We continued to make good progress in the first half. Financial results were ahead of our expectations, with strong growth from civil aerospace and power systems, and we achieved a number of operational and technological milestones," chief executive Warren East said.




BBC     News.