Rolls-Royce has managed to reduce the engine-maker’s half-year losses but is still struggling with ongoing woes concerning its troubled Trent 1000 engine. The Group reported statutory interim pre-tax losses of £791 million against £1.2 billion a year ago. On an underlying basis, half-year profits rose 16% to £94 million for the six months to June 30, while operating profits jumped 32% to £203 million.
Customer disruption was still being caused by the Trent 1000 problems which has seen the Group raise its estimated in-service costs by a further £100 million over the next three years. The Trent 1000’s technical issues have persisted since 2018 and has proved to be a major problem for Boeing, whose 787 Dreamliner jet is powered by this problematic engine. Rolls-Royce has had to make an additional £59 million charge relating to Airbus’ decision to cease production of the A380 superjumbo jet, taking the total hit on that aircraft to £245 million. However it backed its 2019 guidance for underlying operating profit and free cash flow of £700 million, plus or minus £100 million.
Commenting on the Group’s half-year result, Chief executive Warren East said: “We delivered further progress across the group in the first half in line with our full-year expectations. We have made good progress on resolving the Trent 1000 compressor issue, though, regretfully, customer disruption remains. Progress on our restructuring programme is in line with the plan we outlined a year ago.” The group is currently in the process of a major overhaul with approximately 2,500 jobs cut from a targeted 4,600 as the Group is aiming to save £400 million by 2020. (£1.00 = US£1.21 at time of publication.)