Rolls-Royce is upbeat as its profits return

ROLLS-ROYCE bounced back into the black last year and ended 2009 with a record order book, enabling the company to raise its dividend.

The engine maker made a net profit of £2.2bn, compared with a loss of £1.3bn in 2008. Revenues climbed 14.7 per cent to £10.4bn and its order book increased more than fourfold to £58.3bn by the end of the year.

Revenues from outside civil aerospace grew strongly and made up more than half of the total.
“Rolls-Royce has delivered a solid set of results despite difficult trading conditions. This demonstrates the resilience of our business,” said chief executive Sir John Rose. “Our record order book, the breadth of the portfolio across all four sectors, our strong balance sheet and the early action we have taken to reduce costs will enable us to manage short-term difficulties and deliver long-term growth.”

Rolls-Royce got hit by delays to several major projects last year, including the Airbus A380, the Boeing 787 and the Airbus A400M military transport plane. It has shifted its focus away from civil aerospace and its defence and marine divisions put in growth of 19 per cent and 17 per cent respectively last year. The energy business saw a 36 per cent surge and revenues topped £1bn for the first time.

The company has also reduced its reliance on its traditional markets of Europe and North America. Nearly half its orders now relate to Asia, the Middle East and South America.

The group expects underlying revenues to be flat this year and warned the next few years would be tough. “The economic environment remains challenging and it seems likely that world growth will be slower in the years ahead than it has been in the past decade,” it said. Rolls-Royce raised its final payment to shareholders by five per cent to 9p a share.