Engineering news
Rolls-Royce has reported a 32% fall in pre-tax profit to £439 million for the six months ended 30 June.
The company's revenue also fell in the six month period, dropping 3% to £6.3 billion. But, its order book up increased by £2.8 billion to £76.5 billion.
Rolls-Royce said the disappointing performance was due to the slowdown in its marine business, a slightly higher research and development charge and the shift in mix of airliner engines it sells as sales of newer types of engine are less profitable initially but more so over the course of their service life.
Warren East, chief executive, said: “In the near term, we are managing a significant transition from mature engines to newer, more fuel efficient ones, such as the Trent XWB, Trent 7000 and Trent 1000. At the same time, we are taking appropriate actions to mitigate the effects of weakness in our offshore marine markets.
“While these create a profit headwind in the near term, it is critical we successfully deliver our product launches, complete our supply chain transformation and sustain investment in our businesses to strengthen their competitive positions. The initial phase of my ongoing operational review has and will continue to concentrate on how we drive improvements and sharpen our focus to make us a more resilient and sustainable business.”
The company's aerospace division posted a 27% fall in pre-tax profit to £432 million, while its revenue increased 2% to £4.3 billion.
Its Land & Sea division reported a 56% fall in pre-tax profit to £48 million, while its revenue fell 12% to £2.0 billion.
East added: “Despite the disappointment of our recent update, our second half outlook remains positive and full-year guidance for revenue, profit and cash issued on 6 July remains unchanged. The continued growth in our order book demonstrates the long-term demand for our innovative products and services, and underpins my confidence in the fundamental strength of our business.”