Rolls-Royce says net profit dips on weak dollar, higher costs
Rolls-Royce said that first-half net profit fell 3.9 pc to 294 million pounds (374 million euros, 587 million dollars) owing to a weak dollar and higher costs.
By Agencies |
LONDON: Rolls-Royce, the maker of plane engines, said on Thursday that first-half net profit fell 3.9 per cent to 294 million pounds (374 million euros, 587 million dollars) owing to a weak dollar and higher costs.
In comments issued alongside the results, the British group's chief executive John Rose voiced optimism about the outlook for Rolls-Royce despite a downturn for the airline industry amid an economic slowdown.
Rolls-Royce said in a statement that its order book grew almost 17 per cent to 53.5 billion pounds in the first six months of 2008 from a year earlier, "further extending the visibility of future revenues."
The group added that Asian and Middle East markets accounted for more than 40 per cent of orders for its power systems to be used by the aerospace, energy and marine industries.
Its civil aerospace business would drive the company forward, Rose said.
"The youth, scale and geographical diversity of our civil aerospace (business) ..along with our broad portfolio, will help mitigate the consequences of uncertain conditions in the airline industry," the chief executive said in the statement.
"We are confident that we will continue to deliver profitable growth and positive cash flow for the full year," he added.
Group revenue climbed by 12.8 per cent to 4.049 billion pounds in the six months to June 30, Rolls-Royce said in its statement to the London Stock Exchange.
Underlying pre-tax profit increased by eight percent to 410 million pounds, added the group.
"This increase in profitability was achieved after the impact of a further five cent deterioration in the US dollar achieved exchange rate, increases in energy and commodity costs and a 36 million-pound increase in restructuring charges," it said.
Rolls-Royce, which is making engines for the new Airbus widebody A350 aircraft, said activity in the group's civil aerospace business had continued to increase strongly in the first-half despite slowing economic growth and rising fuel prices.
"Since the launch in July 2006 of the Airbus A350 XWB, for which the Trent XWB is currently the sole engine, firm orders have been placed to date for more than 700 engines. The engine addresses a sector of the market estimated to be worth 186 billion dollars over the next 20 years," it added on Thursday.
Rolls-Royce had announced in January plans to reduce its global support staff by 2,300 owing to the weak dollar.
On Thursday it said that about 1,900 employees had since left Rolls-Royce, adding that the remainder should be gone by the end of the year.
Following its results update, Rolls-Royce saw its share price gain 1.83 per cent to 375.50 pence on London's FTSE 100 index, which was down 0.75 per cent at 5,408.80 points.
In comments issued alongside the results, the British group's chief executive John Rose voiced optimism about the outlook for Rolls-Royce despite a downturn for the airline industry amid an economic slowdown.
Rolls-Royce said in a statement that its order book grew almost 17 per cent to 53.5 billion pounds in the first six months of 2008 from a year earlier, "further extending the visibility of future revenues."
The group added that Asian and Middle East markets accounted for more than 40 per cent of orders for its power systems to be used by the aerospace, energy and marine industries.
Its civil aerospace business would drive the company forward, Rose said.
"The youth, scale and geographical diversity of our civil aerospace (business) ..along with our broad portfolio, will help mitigate the consequences of uncertain conditions in the airline industry," the chief executive said in the statement.
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"We are confident that we will continue to deliver profitable growth and positive cash flow for the full year," he added.
Group revenue climbed by 12.8 per cent to 4.049 billion pounds in the six months to June 30, Rolls-Royce said in its statement to the London Stock Exchange.
Underlying pre-tax profit increased by eight percent to 410 million pounds, added the group.
"This increase in profitability was achieved after the impact of a further five cent deterioration in the US dollar achieved exchange rate, increases in energy and commodity costs and a 36 million-pound increase in restructuring charges," it said.
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Rolls-Royce, which is making engines for the new Airbus widebody A350 aircraft, said activity in the group's civil aerospace business had continued to increase strongly in the first-half despite slowing economic growth and rising fuel prices.
"Since the launch in July 2006 of the Airbus A350 XWB, for which the Trent XWB is currently the sole engine, firm orders have been placed to date for more than 700 engines. The engine addresses a sector of the market estimated to be worth 186 billion dollars over the next 20 years," it added on Thursday.
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Rolls-Royce had announced in January plans to reduce its global support staff by 2,300 owing to the weak dollar.
On Thursday it said that about 1,900 employees had since left Rolls-Royce, adding that the remainder should be gone by the end of the year.
Following its results update, Rolls-Royce saw its share price gain 1.83 per cent to 375.50 pence on London's FTSE 100 index, which was down 0.75 per cent at 5,408.80 points.
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