Rolls Royce reported a more than fivefold increase in half year profit this morning to £673m, as it cashed in on soaring demand for jet engines and defence technology.
Revenues jumped from £5.3bn to £6.9bn year-on-year for the six months ending June.
Rolls said the improved profit was driven by its Civil Aerospace segment, which manufacturers aircraft engines for Airbus and Boeing and saw a sixfold increase in trading cashflow to £401m.
Total flying hours for the jet makers’ engines were up 36 per cent versus the prior year period and at 83 per cent of pre-pandemic levels, with the firm notching 240 orders in the first half of 2023.
Tufan Erginbilgic, CEO, said: “Our multi-year transformation programme has started well with progress already evident in our strong initial results and increased full year guidance for 2023.”
He added: “Despite a challenging external environment, notably supply chain constraints, we are starting to see the early impact of our transformation in all our businesses. Better profit and cash generation reflect greater productivity, efficiency, and improved commercial outcomes.”
It marks an extraordinary return to form for the aerospace giant since Erginbilgic took the helm seven months ago.
The new boss has aimed to revitalise the business after a pandemic which hit civil aviation hard.
Erginbilc said in May that key parts of the company had been “grossly mismanaged,” with Rolls a “burning platform” that desperately needs slash debts and up its profits.
But now the company – which builds Typhoon jets used in Europe and the Middle East – is benefitting from a boom in defence spending amid the war in Ukraine and rising geopolitical uncertainty globally. Just yesterday, competitor BAE systems upped its dividend on the back of soaring demand for its weapons.
Renewed travel demand in the post-pandemic period has further propped up margins, with Boeing and Airbus – who Rolls build 787 and A350 jet engines for – seeing a record six months of global aircraft deliveries, according to figures out this week from trade body the ADS.
The engine makers’ recent rebound came to a head last week when it doubled its profit guidance, sending shares rocketing up 20 per cent. Today’s announcement is further indication of clearer skies ahead for the group.