Rolls-Royce suffers big slump in profits

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Engine maker Rolls-Royce has reported a 32 per cent slump in profits for the first half of the year, but says it remains on track to meet its full year guid- ance.

Underlying profit before tax was £439m, compared to £646m a year earlier. Revenue was also down 3 per cent – from £6.5bn to £6.3bn.

Earlier this month, Rolls issued its third profit warning in the last 12 months, citing weak demand for some of its aircraft engines as well as falling oil prices.

But despite the latest profits hit, Rolls-Royce chief executive Warren East insisted the company remains on track to hit its 2015 guidance.

“Despite the disappointment of our recent update, our second half outlook remains positive and full-year guidance for revenue, profit and cash issued on July 6 remains unchanged,” he said.

He added: “The continued growth in our order book demonstrates the long-term demand for our innovative products and services, and underpins my confidence in the fundamental strength of our business.”

“In the near term, we are managing a significant transition from mature engines to newer, more fuel efficient ones, such as the Trent XWB, Trent 7000 and Trent 1000.

“At the same time, we are taking appropriate actions to mitigate the effects of weakness in our offshore marine mar- kets.”