engineer Rolls-Royce warn-ed yesterday that deteriorating economic conditions meant its profit would not rise next year as previously forecast, sending its shares plunging as much as 16 per cent.
Rolls-Royce said the market for its main aircraft engine business would strengthen but customers in the oil and gas, mining, construction, industrial and agricultural sectors were cancelling or delaying orders.
“The economic environment has deteriorated, and it has deteriorated quite quickly,” chief executive John Rishton said.
Wherever you look there were signs of economic slowdown such as the fall in oil and iron ore prices, an absence of growth in Europe and a slowdown in China, Mr Rishton said.
The company, which as recently as July predicted growth in 2015, said underlying profit next year would at best be unchanged from 2014 and 3 per cent lower at worst.
The downgrade was the second this year by the world’s second-largest maker of aircraft engines after US group General Electric. It paves the way for another year of stagnation after more than a decade of strong growth.
Oil prices have slumped more than a fifth since June, prompting customers in that sector to cancel orders, the company said. Rolls-Royce also blamed tightening sanctions on Russia over the Ukraine crisis for hitting its results.