Latest News | 10 August 2021

Rolls-Royce returns to profit

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The boss of Rolls-Royce has said the engineering giant is making “solid progress” following a return to profit.

The firm, which has its civil aerospace and defence divisions in Derby, recently reported it had returned to pre-tax profit during the first half of its financial year.

In the six months to 30 June, the company made a statutory pre-tax profit of £114 million, up from a loss of £5.2 billion. Underlying pre-tax profit reached £133 million from a £3.2 billion loss over the same period.

Chief executive Warren East said: “Our continued focus on the elements within our control, together with a good performance from defence and order intake recovery in power systems, have enabled us to deliver solid progress in the first half.

“The benefits of our fundamental restructuring programme in civil aerospace are evident in our reduced cash outflow and improved operational efficiency.”

Underlying revenue at the manufacturer dropped to £5.2 billion, down from £5.4 billion last year. Its statutory group revenue also fell to £5.1 billion from £5.6 billion.

However, Mr East said that efforts to reduce costs had put Rolls-Royce in a good position to take advantage of the recovery in international travel.

He said: “This leaner cost base, together with a strong liquidity position, gives us confidence in our ability to withstand uncertainties around the pace of recovery in international travel and benefit from the eventual rebound.

“We are making disciplined investments in the new opportunities to drive future growth, particularly in net zero power, where we are leading the way with innovation and engineering excellence.

“Our net zero pathway and targets, announced in June, set out our plan to enable the sectors in which we operate achieve net zero by 2050 by driving step-change improvements in engine efficiency, helping accelerate the take-up of sustainable fuels and developing new technologies.”

As well as announcing its half-year results, Rolls-Royce also confirmed it had entered into exclusive discussions with a consortium for the sale of ITP Aero, a Spanish aero engine and gas turbine manufacturer, which employs around 4,300 people.

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