Rolls-Royce has announced soaring half-year profits in its latest results.
The aerospace giant, which has UK bases in Bristol and Derby, posted underlying operating profits of £673m for the six months to June 30. This is more than five times the £125m in the previous year.
The FTSE 100 company, which produces engines for some of the world’s largest commercial aircraft, said on July 26 has raised its full-year operating profit forecast by around 45% and expected underlying operating profit to be £1.2bn-£1.4bn this year, up from a previous expectation of £0.8bn-£1bn.
The engine-maker revealed today (August 3) it had swung to a pre-tax profit of £1.4bn from losses of £1.8bn a year ago.
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Rolls-Royce has not seen levels like this since the start of the Covid-19 pandemic and credited its turnaround programme and bounce-back in international travel, which is driving demand from airlines for engine maintenance.
The firm added an increased focus on costs and productivity has "helped to offset the impact of inflation and supply chain pressures".
Chief executive Tufan Erginbilgic said: "Our multi-year transformation programme has started well with progress already evident in our strong initial results and increased full year guidance for 2023. There is much more to do to deliver better performance and to transform Rolls-Royce into a high performing, competitive, resilient, and growing business. We will share the outcome of our strategy review along with medium-term goals for the Group in November."
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The company also reported improvement in flying hours by engines from its civil aerospace operation, up 36% in the first half and reaching 83% of 2019 levels. It also banked 240 large engine orders in the half-year, up from 96 the previous year.
Its civil aerospace division delivered operating profits of £405m compared with a loss of £79m a year ago. Operating profits grew by a third to £261m in its defence business – which the group said was its most “resilient” division – with the sector benefiting from increased global demand as a result of the war in Ukraine.
Mr Erginbilgic continued: "Our people are committed, passionate and full of energy. Despite a challenging external environment, notably supply chain constraints, we are starting to see the early impact of our transformation in all our businesses. Better profit and cash generation reflect greater productivity, efficiency, and improved commercial outcomes. We have tightly managed our cost base to offset inflationary cost pressures.
"We have a strong portfolio of products and technologies in growing end markets and have secured key contract wins that will create future value and profitable growth. Our continued transformation will grow our business and allow us to play a stronger role in the energy transition."
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