Rolls-Royce rounded off 2019 on a positive note having overcome most of the problems which had particularly beset its Trent 1000 TEN engine variant which powers the Boeing 787 Dreamliner with durability issues.
With the roll-out of fixes progressing and increased confidence in a new engine blade due for production next year, the number of grounded jets requiring inspection or repairs to engines should drop to single digits by the end of the second quarter this year, which, according to Warren East, Rolls-Royce CEO, is in line with forecasts.
Rolls-Royce reported a £852 million operating loss for 2019, predominantly owing to a £1.4 billion charge for the Trent 1000, without which, core underlying profit rose 25% to £810 million. Cash flow increased to £911 million, led by higher profit and Trent 1000 insurance receipts worth £173 million. East confirmed that Rolls-Royce had delivered a record 510 wide-body aircraft engines in the year and secured about two out of three orders for new wide-body engines.
Meanwhile, the British engine maker sees the COVID-19 outbreak as an “unknown unknown” with regard to both scale and duration. However, it confirmed that its supply chain, including that from China, had not experienced any disruptions. According to Reuters news agency, Rolls-Royce currently expects core operating profit to grow by about 15% this year, with at least £1 billion of free cash flow. (£1.00 = US$1.28 at time of publication.)
