LONDON – British engine manufacturer Rolls-Royce sees its objectives for the year confirmed thanks to the gradual resumption of long-haul air traffic. The growing number of flight hours is expected to lead to more maintenance orders, the company said in London on Thursday.
In the first half of the year, the flight hours of large long-haul aircraft reached 60% of the level before the corona pandemic. For several years, Rolls-Royce focused entirely on engines for large aircraft. The slump in business following the pandemic has hit the company harder than other engine makers.
In the first half of 2022, however, things picked up. Compared to the same period last year, Rolls-Royce has reduced cash outflows from around 1.1 billion to just 77 million pounds sterling (92 million euros).
While sales rose more than eight per cent to £5.6 billion, operating profit fell from £38 million to £223 million. However, impairments on financial instruments and currency effects plunged the group into the red with a net profit of 1.6 billion pounds. A year earlier there had been a profit of £394million. The result was lower than expected by the experts.
For the current year, Rolls-Royce still plans to deliver 350 to 400 new aircraft engines. Group sales are expected to grow in the low to mid single digits on a like-for-like basis. In operations, management expects to be in the dark before special effects.
In 2021 as a whole, Rolls-Royce returned to black after years of severe losses. CEO Warren East will step down at the end of the year. Former BP boss Tufan Erginbilgic will be the new boss of Rolls-Royce from January 1, 2023.
Operational activity below expectations
Despite the recovery in the first half and the hope of a recovery in activity, the stock fell. The paper fell as much as seven percent in the morning, making it one of the weakest values in Britain’s FTSE 100 index. Traders attributed this mainly to the fact that operating profit did not did not meet expectations.
With a price drop of more than 60% since the outbreak of the corona pandemic, the newspaper is one of the biggest losers in the crisis. By way of comparison: the shares of competitor MTU only lost around 30% over the period.
© dpa-AFX | 08/04/2022 10:59