Rolls positive on 2012 as its earnings soar
ROLLS-ROYCE yesterday reported a 21 per cent rise in full-year profit, triggered by demand from airlines for more fuel-efficient planes, and said it expects further progress in 2012.
The world’s second-largest maker of aircraft engines behind General Electric reported underlying 2011 pre-tax profits of £1.16bn compared with a forecast for £1.15bn.
This prompted the firm to raise its full-year dividend nine per cent to 17.5p. Revenues rose four per cent to £11.3bn.
Chief executive John Rishton said: “We had a good year in terms of civil aerospace and we are positive on it looking ahead given the airlines’ capacity growth and their need to reduce the fuel bill.”
The results were enhanced by the company’s acquisition of German engine maker Tognum last year and the £950m sale of its stake in International Aero Engines.
“Overall, a solid result in our view, with the prospect of continued long-term growth underpinned by the order book, growing aftermarket sales and contribution from Tognum,” Investec analyst Andrew Gollan said.
Rishton said a new joint venture with rival Pratt & Whitney to develop the next generation of engines for the mid-sized “narrowbody” market would be officially formed this year.
Analysts forecast that 20,000 narrowbody planes will be produced in the next 20 years.
Of the £16.3bn of new orders Rolls received in 2011, around £11bn came from civil aerospace orders.
Rolls said its order book grew five per cent.
Revenue at its defence business rose, though sales at its energy and marine units fell slightly.