ROLLS-ROYCE posted a better-than-expected seven per cent rise in first-half profit yesterday, driven by increased production at planemakers Airbus and Boeing who are responding to growing demand from airlines for new fuel-efficient planes.
Rolls, the world’s second-largest maker of aircraft engines behind US group General Electric, reported an underlying pre-tax profit of £637m for the six months to the end of June on revenues five per cent higher at £5.8bn.
Europe’s Airbus and US rival Boeing are ramping up output and are targeting more than 1,100 deliveries this year.
The company, whose website says a Rolls-Royce powered aircraft takes off or lands every 2.5 seconds, raised the interim dividend by 10 per cent to 7.6p per share and said it expected to deliver further growth in 2012 in spite of global economic uncertainty.
“For the full year, we continue to expect good growth in underlying profit with cash flow around breakeven,” chief executive John Rishton said.
“The volatility of the economic environment -- whether it’s in Europe, a slowdown in China or the US -- does have an impact and none of us are immune to this. But the diverse range of products we produce and the geographic spread we have helps protect us.”
Rolls, which has more than 5,000 engines worth some £50bn on order, said revenues at its main civil aerospace unit rose 17 per cent in the last six months. Around 60 per cent of the unit’s revenues come from aftermarket services.
City A.M. Reporter